Sensex, Nifty Likely to Open Lower on Profit Booking; Support at 24,400-24,500

Mumbai: Domestic equity benchmarks are expected to start the day on a weak note, with the Nifty likely to open around 24,535, nearly 100 points lower, amid negative cues from global markets. According to Gaurav Udani, Founder of Thincredblu Securities, the index is set to witness profit booking after the recent rally, though the broader trend remains positive as long as key support levels hold.

Analysts have pointed to immediate support for the Nifty in the 24,400-24,500 zone, where buying interest is expected to emerge on declines. On the upside, the key resistance range is seen at 24,700-24,800. A decisive move above this zone could signal a continuation of the ongoing uptrend and pave the way for fresh highs.

The cautious stance comes after a strong run in the market, which had lifted indices to record levels in recent sessions. However, global factors, including concerns over interest rates, geopolitical tensions, and fluctuations in crude oil prices, have weighed on investor sentiment. Asian markets were trading mixed in early deals, while US futures pointed to a subdued opening on Wall Street.

Market participants are advised to view the current dip with caution rather than panic. As long as the Nifty holds above the 24,400 support zone, the preferred strategy remains to buy on declines. Traders should avoid aggressive short positions against the prevailing trend, as a breach of the support level could alter the near-term outlook.

The Sensex, which tracks the broader market, is also expected to open lower in tandem with the Nifty. However, individual stock moves may be influenced by company-specific news, foreign institutional investor flows, and sectoral trends.

Investors are also keeping an eye on the upcoming domestic economic data and corporate earnings for further direction. While profit booking is a natural part of any rally, the underlying fundamentals and macroeconomic indicators remain supportive, analysts say.

The recent rally had been driven by strong inflows from domestic institutional investors, improving corporate earnings, and expectations of policy stability. However, valuations have become stretched in certain segments, prompting some investors to lock in gains at elevated levels.

Technical analysts suggest that a close above the 24,700-24,800 resistance zone would be crucial for the market to resume its upward momentum. On the flip side, a sustained fall below 24,400 could trigger further selling pressure, dragging the index towards lower support levels.

Traders are advised to keep a close watch on global cues, particularly the movement of US bond yields and the dollar index, which influence foreign fund flows into emerging markets like India. Any surprise on the geopolitical front or a spike in oil prices could add to volatility.

Despite the expected weak opening, the overall sentiment remains constructive, with many analysts viewing the dip as a buying opportunity. The key is to remain disciplined and avoid herd behaviour, focusing on quality stocks with strong fundamentals.

As the trading day progresses, the actual movement of the indices will depend on how global markets behave and whether domestic buying interest emerges at lower levels. The current guidance from market experts points to a day of consolidation, with the potential for a rebound if support levels hold.