Nifty Snaps Five-Day Rally, Falls 154 Points as IT Stocks Weigh on Sentiment
The Nifty 50 index ended its five-session winning streak on Friday, declining 154.90 points (0.64%) to close at 24,013.10. Broad-based selling in information technology stocks led the decline, as global cues weighed on investor sentiment.
The weakness in IT stocks followed Accenture's softer-than-expected outlook, which triggered profit booking across the sector. The index briefly slipped below the 24,000 mark during intraday trading before staging a partial recovery.
Global markets presented a mixed picture at the start of the week. US markets were closed on Friday for Juneteenth, but the Nasdaq and S&P 500 had rallied strongly earlier in the week, led by semiconductor stocks. Asian markets traded mixed, with gains in Japan and South Korea offsetting declines in Chinese equities. Brent crude oil stabilised near $80 per barrel after a sharp correction last week, providing some relief for India's inflation and fiscal outlook. However, geopolitical developments in the Middle East remain a key factor to monitor.
Domestically, GIFT Nifty indicated a positive start for the week, suggesting that Friday's decline may be a healthy corrective move within the broader recovery trend. Rajesh Palviya, Head of Research at Axis Direct, noted that the 24,000 level continues to be a crucial support zone. Sustaining above this level is likely to keep the positive bias intact, with immediate resistance placed at 24,150–24,200. A decisive breakout above this zone could trigger fresh buying interest and short covering, potentially leading the index towards 24,300–24,400. On the downside, a breach below 24,000 may invite profit booking towards 23,900 and subsequently 23,800.
The overall strategy, according to Palviya, remains 'buy on dips' as long as the Nifty holds above the 23,900 support zone. Investors are advised to monitor global cues and domestic economic data for further direction.
