The 200-DSMA is around 23,870, acting as a short-term resistance, while 23,500 will serve as the support level

Motilal Oswal Team Mumbai

Indian benchmark indices ended Tuesday with modest losses, marking the second consecutive day of decline. The Nifty 50 closed just below 23,650, after reaching a high of 23,689.85 points during the afternoon. The S&P BSE Sensex fell by 109.12 points, or 0.14%, to close at 78,139.01. The Nifty 50 ended nearly flat at 23,644.80. 

The market was pressured by weakness in IT stocks, though gains in sectors like pharma, PSU banks, and oil and gas provided some support. Investor sentiment remained cautious due to a rising US dollar and continued selling by foreign institutional investors (FIIs) as the year ended. 

On the daily chart, Nifty has held its trend line support and formed a bullish candle, suggesting strength. The 200-day simple moving average (200-DSMA) is around 23,870, acting as a short-term resistance, while 23,500 will serve as the support level.

"In the derivatives space, a balanced tug-of-war between call and put writers reflected market indecision as traders awaited a clear trigger," said Dhupesh Dhameja, derivatives analyst at SAMCO Securities, in a note. "Nearly equal additions in both call and put options created a constrained range of 23,500-24,000, reinforcing the stalemate between bulls and bears."

Bank Nifty closed slightly lower at 50,860. It bounced back from its trendline support and held above the 200-day simple moving average (200-DSMA) around 50,600. The formation of a green candle on the daily chart signals strength.

On the upside, the 50-day exponential moving average (50-DEMA) near 51,915 will act as resistance. In the short term, Bank Nifty is likely to trade between 50,500 and 52,000, with a breakout in either direction setting the trend. 

Major laggards included Adani Enterprises (down 2.48%), Infosys (down 1.31%), and ICICI Bank (down 0.92%). 

For the year 2024, the Bank Nifty increased by 5.32%. Broader market indices outperformed the benchmarks, with the S&P BSE Mid-Cap index up by 0.13% and the S&P BSE Small-Cap index rising by 0.71%. 

The market breadth was positive, with 2,320 advancing shares, 1,649 declining, and 110 remaining unchanged.