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The Indian stock market experienced a downturn on July 10, with both the Nifty and Sensex closing lower for the second consecutive session. The Nifty benchmark dipped below the 25,400 level, a psychological threshold that has often acted as a support in recent times. This decline can be attributed to a confluence of factors, primarily concerns surrounding potential tariff actions by the US President, coupled with investor anticipation ahead of the Q1FY26 earnings report from Tata Consultancy Services (TCS), a bellwether for the Indian IT sector. The Sensex mirrored this bearish sentiment, shedding 345.80 points, or 0.41 percent, to close at 83,190.28. Similarly, the Nifty 50 index ended the day at 25,355.25, down 120.85 points, or 0.47 percent. This broad-based weakness was not confined to the headline indices alone, as the Nifty Midcap and Smallcap indices also succumbed to selling pressure, each registering a loss of 0.3 percent. The sectoral performance painted a mixed picture, with the majority of indices closing in the red. Notable exceptions included the metal and realty sectors, which managed to buck the trend and post gains. However, other prominent sectors such as pharmaceuticals, telecommunications, information technology (IT), PSU Banks, and fast-moving consumer goods (FMCG) all experienced declines of around 0.5 percent each. The cautious sentiment surrounding IT stocks was particularly palpable, given the imminent release of TCS's Q1 results. The performance of individual stocks within the Nifty 50 index was equally varied. Among the major losers were Bharti Airtel, HDFC Life, Asian Paints, Apollo Hospitals, and Shriram Finance, all of which witnessed significant selling pressure. On the other hand, IndusInd Bank, Maruti Suzuki, Tata Steel, Bajaj Finance, and Bajaj Finserv emerged as the top gainers, providing some respite to the overall market decline. In terms of stock-specific action, certain companies garnered attention due to positive developments. Prestige Estates shares, for instance, jumped nearly 3% following bullish reports from brokerages after a record Q1 business update. IREDA rose over 2% ahead of its Q1 results, and RailTel Corp shares gained on securing an order from Chhattisgarh. Furthermore, GP Eco Solutions India shares surged 5 percent on securing an EPC contract worth Rs 122 crore, while JTL Industries shares advanced 3 percent on announcing a capacity expansion plan. Power Finance Corp shares also experienced a rally of nearly 3 percent following a block deal involving 1.11 million shares. Interestingly, despite the overall market weakness, a significant number of stocks reached new 52-week highs on the Bombay Stock Exchange (BSE). These included prominent names such as Glenmark Pharma, UTI AMC, Krishna Institute of Medical Sciences, Laurus Labs, UltraTech Cement, SRF, LT Finance, and Navin Fluorine, among others. This suggests that while the broader market sentiment may have been negative, certain individual stocks continued to demonstrate resilience and growth potential.
Looking ahead to July 11, market analysts have offered their insights and perspectives on the potential trajectory of the Nifty 50 index. Rupak De, Senior Technical Analyst at LKP Securities, highlighted that the Nifty has slipped lower following a breakdown from a congestion zone on the daily chart, thereby reinforcing the prevailing bearish sentiment. He further noted that the index has moved below the 21-hour exponential moving average, suggesting a weakening of its upward momentum. The Relative Strength Index (RSI), a popular momentum indicator, has also turned negative on the daily chart, further confirming the bearish outlook. According to De, the short-term trend is likely to remain weak, which could lead to further downside for the Nifty. He identified potential support levels in the range of 25,250–25,200, while resistance levels are seen at 25,400 and 25,500. Aditya Gaggar, Director of Progressive Shares, echoed the bearish sentiment, stating that today's trade was dominated by bears. He observed that after a muted start, the market witnessed a one-sided move toward the south, ultimately ending the session at 25,355.25 with a notable loss of 120.85 points. Gaggar also pointed out that with the exception of the Realty and Metal sectors, all other sectors closed in negative territory, with IT and PSU Banking being the major laggards. He further noted that the broader markets outperformed the Frontline Index, as the Midcap and Smallcap segments managed to restrict their corrections. Gaggar highlighted the significance of the 25,400 level, which had acted as a strong support in the past few sessions. However, this level was breached in today’s trade, although he emphasized that a confirmatory move is required to confirm the breakdown. If the downward momentum continues, Gaggar anticipates that the correction could extend further toward the 25,200 mark, while resistance is now seen lower at 25,520. Ajit Mishra, SVP, Research at Religare Broking, noted that markets edged lower and lost nearly half a percent on the weekly expiry day. He observed that after a flat start, the Nifty gradually drifted lower as the session progressed and finally settled near the day’s low, around the 25,355.25 mark. Mishra attributed the weakness to profit booking in IT majors ahead of TCS results, followed closely by weakness in FMCG and pharma stocks. However, he noted that the realty and metal sectors bucked the trend and closed in the green. He also mentioned that the broader indices also ended with modest losses, continuing their profit-taking phase.
Mishra anticipates that markets will react to TCS’s earnings in early trade, with a keen eye on management commentary, which could set the initial tone. He highlighted that the Nifty is now hovering near its immediate and crucial support zone, which is marked by the 20-day exponential moving average (20-DEMA) and the upper boundary of its previous consolidation range around the 25,200–25,300 zone. According to Mishra, it will be critical for the index to hold this level to maintain its positive bias. He also emphasized that with the earnings season underway, stock-specific opportunities are likely to emerge on both sides, and therefore participants should align their positions accordingly. Overall, the market commentary suggests a cautious outlook for the Indian stock market in the near term. Concerns surrounding global factors, such as potential tariff actions, coupled with domestic factors, such as the ongoing earnings season, are likely to keep investors on edge. The technical analysis provided by the experts indicates that the Nifty may face further downside pressure, with key support levels to watch out for. However, it is also important to note that stock-specific opportunities may arise during this period, particularly as companies release their earnings reports. Therefore, investors are advised to remain vigilant, conduct thorough research, and align their positions accordingly. The information provided in this summary is based on expert views and analysis, and it is essential for investors to conduct their own due diligence before making any investment decisions. The stock market is inherently volatile, and past performance is not necessarily indicative of future results. Therefore, it is crucial to consult with certified experts and consider individual risk tolerance and investment objectives before taking any action. The opinions expressed in this summary are those of the analysts and do not necessarily reflect the views of the website or its management. Investors are advised to exercise caution and seek professional advice before making any investment decisions.
Source: Taking Stock: Nifty ends below 25,400, Sensex lower as investors await TCS Q1, tariff decision