Nifty, Sensex lack direction on monthly F&O expiry; investors cautious ahead of GDP data

The market has suddenly turned unpredictable amidst high volatility, and this uncertainty is expected to persist in the near term

Benchmark indices Nifty and Sensex ended flat on February 29 on account of monthly F&O expiry. Investors also remained cautious ahead of India's GDP data due later in the day.

The tone was subdued at the beginning and a mixed trend across heavyweights capped the move till the end. Meanwhile, a lackluster move on the sectoral front kept the traders on their toes wherein realty and IT edged lower.

The market has suddenly turned unpredictable amidst high volatility, and this uncertainty is expected to persist in the near term, according to analysts. Investors may wait for the volatility to subside before taking positions, they said.

The Sensex closed 195.42 points or 0.27 percent at 72,500, and the Nifty was up 31.60 points or 0.14 percent at 21,982. About 1,650 shares advanced, 1,649 declined, and 86 remained unchanged.

In the broader market, BSE Midcap and Smallcap indices outperformed, rising 0.8 ane 0.5 percent, respectively.

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Sectorally, Nifty PSU Bank led the gains, rising over one percent. It was followed by Nifty Metal, Pharma and Bank indices. Meanwhile, Nifty Media and Healthcare led the losses, falling up nearly 1 percent. Nifty IT also ended in the red.

Fundamental view

Domestic benchmark traded near a flat-line trend throughout the session, but some buoyancy emerged by the end of the day, heling the indices to close with modest gains. Investors adopted a cautious wait-and-watch approach on the verge of a heavy economic data week.

"India Q3 GDP has a moderate outlook on a QoQ basis. Fed’s preferred gauge; the US personal consumption expenditure (PCE) price index is due to provide a clue on the future interest rate cut path and China’s PMI index is scheduled to be released Friday," said Vinod Nair, Head of Research, Geojit Financial Services.

Technical view

"We are seeing a tussle at 21,900 in Nifty, which coincides with a short-term moving average i.e. 20 DEMA, and expect the index to face a hurdle around the 22,100-22,250 zone, in case of a recovery," said Ajit Mishra, SVP - Technical Research, Religare Broking Ltd.

"At the same time, excessive volatility and failed breakouts across sectors are further adding to the traders’ worries. We feel it is prudent to avoid aggressive trades in the current scenario and utilize rebound to reduce longs," he added.

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