The benchmark equity indices ended the October series on a negative note after witnessing selling pressure across various sectors. As per analysts from Geojit Financial Services, the Nifty 50 is hovering around an important support zone and may witness a slip towards newer lows if this support level is breached going forward.
Anand James, Chief Market Strategist at Geojit Financial Services, notes that the Nifty 50 index closed the month’s expiry session lower. Various sectors like auto and realty dragged the broader market down, while healthcare and energy sectors saw relatively better futures rollovers. The volatility index also inched up, reflecting the unease amongst market participants at the beginning of November.
Technically, the Nifty index is trapped within a narrow range of 24150-24550 levels currently. Failure to sustain above 24550 could trigger another downswing. The immediate support comes in at 24150 and a substantial violation of this level would expose the index to more weakness in the near term, according to James. He believes the Nifty needs to consistently hold above 25100 to invalidate negative sentiments.
Among other sectors, analysts are seeing potential upside in the pharmaceutical sector looking at past trends. The Nifty Pharma index is positioned near key support and looking oversold on shorter timeframes. Many pharma stocks also show encouraging technical setup and may lead sectoral gains if the index bounds back. The FMCG sector is attempting a pullback from its channel support but needs follow up buying to confirm bottoming out.
Going forward, market volatility is likely to remain high given various domestic and global uncertainties. Investors will be closely watching economic data announcements from the US and ongoing central bank policy actions for further cues.
