The Nifty 50 and Sensex erased all morning gains to trade with sharp losses, as investors rushed to take some profits off the table on Tuesday, October 14. On its weekly expiry, the Nifty 50 index slipped over 100 points after opening firmly in the green, while the 30-pack Sensex was dragged by selling in banking and financials.
At 12:16 p.m., the Sensex was down 369.82 points or 0.45 percent at 81,957.23, and the Nifty was down 111.50 points or 0.44 percent at 25,115.85. About 1083 shares advanced, 2575 shares declined, and 113 shares unchanged.
All sectoral indices traded in the red, with the Nifty PSU Bank, Nifty Consumer Durables and Nifty Metal indices falling over one percent each. The IT index fared the best, falling mildly into the red amid a wide-spread sell-off.
"IT stocks, particularly the largecaps, are viewed as overvalued by the market since they are facing many headwinds and some strong structural issues. On the other hand PSU stocks have been trading at very low valuations despite decent growth and robust balance sheets," noted VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
He added that this anomaly in valuations have been corrected by the market. "This trend is likely to continue. However, in growth stocks like digital companies and renewable energy, their long-term growth potential will continue to attract investment despite high valuations."
From a technical perspective, Nifty is hovering near its two-week high around the 25,320 mark, and a sustained follow-through buying could confirm a clean breakout. The index remains comfortably positioned above its 10-day and 20-day exponential moving averages (both near 25,100), forming a robust demand base.
"The 25,100–25,150 zone has now emerged as a crucial “buy-on-dips” pocket for positional traders. On the upside, a decisive move above the immediate resistance band of 25,300–25,330 could trigger a sharp short-covering rally," said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.
"The index continues to display a constructive medium-term setup, marked by its steady pattern of higher highs and higher lows," according to him.
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