Mumbai: The Indian stock market witnessed a day of mixed sentiments on Tuesday, with the Nifty 50 index showcasing resilience after initial selling pressure. The benchmark index opened flat but faced a downward trend in the first half of the session. However, a sharp recovery in the latter half helped it pare most of its losses, closing marginally lower at 22,945. The India VIX, often referred to as the fear gauge, cooled off by 0.36% to 15.67, indicating a slight reduction in market volatility.
Technical Analysis: Hammer Candle Signals Strength
From a technical perspective, the Nifty formed a hammer candlestick pattern on the daily chart, a bullish reversal signal when it appears near a support zone. According to Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C. Mehta Investment Intermediates, this pattern suggests underlying strength in the market.
“The Nifty has found support near the 22,725 level, which is a critical zone. As long as the index holds above this level, a buy-on-dips strategy remains favorable,” Yedve said. He added that the 21-Day Simple Moving Average (DSMA) at 23,240 is acting as an immediate resistance. A decisive break above this level could confirm a near-term bottom reversal, potentially opening the door for further upside.
The hammer candlestick pattern is characterized by a small body and a long lower wick, indicating that sellers pushed prices lower during the session, but buyers managed to recover most of the losses by the close. This pattern is particularly significant when it forms near a strong support level, as it did on Tuesday.
Open Interest Data Hints at Key Levels
The open interest (OI) data provides further insights into market sentiment. On the call side, the highest OI was observed at the 23,200 and 23,000 strike prices, indicating strong resistance levels. On the put side, the 22,700 strike price held the highest OI, followed by 22,900, suggesting these levels as crucial support zones.
The concentration of OI at these strike prices highlights the areas where traders expect the market to face hurdles or find support. For instance, the 23,200 call strike price has seen significant accumulation of OI, indicating that traders are betting on the Nifty facing resistance at this level. Conversely, the 22,700 put strike price has the highest OI, suggesting that traders are positioning themselves for the index to hold above this level.
Sensex Trades Range-Bound Amid Global Cues
The Sensex mirrored the Nifty’s trajectory, oscillating between gains and losses throughout the session. Investors remained cautious amid mixed global cues and uncertainty surrounding the Federal Reserve’s interest rate policy. Wall Street opened higher on Tuesday, with the Dow Jones Industrial Average rising 0.08%, the S&P 500 gaining 0.11%, and the Nasdaq Composite climbing 0.32%.
The U.S. markets were buoyed by a drop in Treasury yields and optimism surrounding potential tariff developments. However, the focus remains on the Federal Reserve’s next move, with investors closely monitoring any hints about the timing of rate cuts.
Sebi Proposes Enhanced Security Measures for Demat Accounts
In a bid to bolster investor confidence, the Securities and Exchange Board of India (Sebi) proposed a new SIM-binding mechanism to prevent unauthorized transactions in demat accounts. The regulator aims to implement a “One UCC-One Device-One SIM” framework, similar to the UPI payment system, to enhance authentication and security.
Under this framework, each demat account will be linked to a specific device and SIM card, ensuring that only authorized users can access and transact in the account. This move comes in response to rising concerns about cyber fraud and unauthorized access to demat accounts.
Sebi’s proposal is expected to significantly reduce the risk of fraudulent activities and provide a more secure trading environment for investors. The regulator has invited feedback from market participants before finalizing the framework.
Vedanta Clears Key Hurdle for Demerger Plan
In corporate news, Vedanta Ltd. received approval from 83% of its creditors for its proposed demerger plan. This paves the way for the company to split its businesses into independent entities, allowing each vertical to operate autonomously. The move is expected to unlock value for shareholders and streamline operations.
Vedanta’s demerger plan involves creating separate entities for its aluminum, oil and gas, and zinc businesses. The company believes that this restructuring will enable each business to focus on its core operations and attract strategic investors.
The approval from creditors was a crucial step in the demerger process, as it required the support of at least 75% of creditors by debt value. With this hurdle cleared, Vedanta is now set to proceed with the next phase of its restructuring plan.
Gold and Silver Prices Rise Amid Global Trends
On the commodities front, gold prices in India rose by Rs 300 to Rs 88,500 per 10 grams, while silver climbed Rs 800 to Rs 99,000 per kg. The uptick was driven by firm global trends and increased demand for safe-haven assets.
Gold prices have been supported by a weaker dollar and lower Treasury yields, which reduce the opportunity cost of holding non-yielding assets like gold. Additionally, geopolitical tensions and economic uncertainty have boosted demand for the precious metal as a hedge against inflation and market volatility.
Silver, often referred to as “poor man’s gold,” has also benefited from these factors, along with strong industrial demand. The white metal is widely used in various industries, including electronics, solar panels, and medical devices, making it sensitive to changes in economic activity.
IPO Watch: Swasth Foodtech India Sets Price Band
Swasth Foodtech India announced its initial public offering (IPO) will open for subscription on February 20, with a price band of Rs 94 per share. The company aims to raise Rs 14.92 crore through the issue, which will be listed on the BSE SME platform.
The IPO consists of a fresh issue of 15.87 lakh shares, with no offer-for-sale component. The proceeds from the IPO will be used for working capital requirements, marketing expenses, and general corporate purposes.
Swasth Foodtech India operates in the rapidly growing health food segment, offering a range of organic and natural food products. The company’s IPO comes at a time when consumer interest in health and wellness products is on the rise, driven by increasing awareness about the importance of a healthy diet.
NTPC Pays Interim Dividend of Rs 2,424 Crore
State-owned power giant NTPC paid an additional interim dividend of Rs 2,424 crore to its shareholders, taking the total dividend payout for the fiscal year to Rs 8,000 crore. This includes the final dividend of Rs 3,152 crore for FY24, paid in September 2024.
The Rs 2,424 crore dividend paid on February 18 represents 25% of the company’s paid-up equity share capital. NTPC’s consistent dividend payouts reflect its strong financial performance and commitment to rewarding shareholders.
The company has been a key player in India’s power sector, with a diversified portfolio of thermal, hydro, and renewable energy projects. NTPC’s focus on expanding its renewable energy capacity aligns with the government’s goal of achieving 500 GW of renewable energy by 2030.
Market Outlook: Volatility Expected Before Recovery
Emkay Institutional Equities predicts increased volatility in Indian equity markets in the near term, with a gradual recovery anticipated in the second half of 2025. The brokerage has set a December 2025 target of 25,000 for the Nifty, driven by a revival in consumption, unsecured lending, and government welfare spending.
The brokerage remains overweight on the discretionary, real estate, and healthcare sectors, citing robust demand potential. However, it has downgraded industrials, IT, and energy to a neutral stance due to valuation concerns and structural challenges.
A rebound in discretionary consumption is expected over the next two to three quarters, supported by improved IT hiring, better liquidity conditions, and an increase in retail lending. Government-led welfare initiatives, particularly women-focused schemes, along with strong winter crop sowing, are also expected to stimulate rural demand.
How to Trade on Wednesday
Traders are advised to keep a close eye on the 22,725 support level for the Nifty. A breach below this level could trigger further downside, while a move above the 21-DSMA at 23,240 could signal a bullish reversal. The hammer candlestick pattern near the support zone suggests that the market may be gearing up for a rebound, making a buy-on-dips strategy favorable for now.
As global developments and domestic factors continue to influence market sentiment, investors should remain cautious and focus on key technical levels for trading opportunities.
Disclaimer: The views and recommendations above are those of individual analysts and do not reflect the official stance of any financial institution. Investors are advised to consult certified experts before making any investment decisions.