Nifty Closes Below 24,550 as Markets Dip Ahead of Inflation Reports

The Indian stock market ended on a downbeat note on December 12, with the Nifty closing just under 24,550 due to widespread selling ahead of two key inflation reports—retail inflation expected later today and WPI inflation coming on Friday.

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By the end of trading, the Sensex slipped 236.18 points (0.29%) to 81,289.96, and the Nifty dropped 93.10 points (0.38%) to settle at 24,548.70.

Despite strong global cues, Indian markets kicked off the day on a weaker note. Early losses were recovered during the morning session, but in the afternoon, profit booking dragged the indices down. Sector-wide selling was evident, with IT stocks being the only exception.

Winners and Losers

On the Nifty, the top gainers included Adani Enterprises, Tech Mahindra, IndusInd Bank, Bharti Airtel, and Adani Ports. On the flip side, NTPC, Hero MotoCorp, HUL, Coal India, and BPCL were the top losers. Every sector except IT ended in the red, with the Media index down 2% and the FMCG index off by 1%.

Nifty’s Range-Bound Moves

For the fifth day in a row, the Nifty stayed stuck in a tight range, trading between 24,500 and 24,700. Analysts are keeping a close watch—if the index falls below 24,500, it could drop to 24,350 or even 24,200. On the upside, breaking past 24,700 could push it towards 24,900–25,000.

The daily chart shows a bearish trend, with the Nifty closing 93 points lower at 24,549. A bearish candlestick with an upper shadow signals selling pressure at higher levels. Still, the index held above key moving averages, with the 20-day EMA staying above the 100-day EMA, which provides some reassurance for bulls.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that sentiment remained weak intraday. If the Nifty dips below 24,500, we could see it test 24,350–24,300 levels. But if it crosses 24,620, it might climb back to 24,700, and further gains could take it to 24,775.

Options Data Insights

Options data reveals some key levels to watch. On the call side, 25,500, 25,000, and 24,600 strikes have the most open interest, with significant call writing there. On the put side, 24,000, 24,600, and 24,500 strikes show strong open interest, indicating immediate support at 24,500 and critical support at 24,000. Resistance is expected at 24,600 and 25,000, suggesting that the Nifty could continue trading within a 24,000–25,000 range in the near term.

Bank Nifty Action

The Bank Nifty briefly climbed above 53,500 in early trading but couldn’t hold on to those gains. It ended the day 175 points lower at 53,216. The daily chart shows a small-bodied bullish candlestick with a long upper shadow—a pattern resembling a Gravestone Doji—which could indicate a trend reversal. However, confirmation in the next session is necessary.

Chandan Taparia from Motilal Oswal Financial Services pointed out that the 53,000 level is crucial. Holding above this level could pave the way for a recovery towards 53,650 and 54,000. Falling below 53,000, however, could signal further weakness, with support around 52,800 and 52,500.

Volatility at a Low

The silver lining? Market volatility continued to decline, with the India VIX dropping 0.58% to 13.19, its lowest level in eight weeks. This low volatility environment could be a positive sign for market bulls moving forward.