Bearish outlook for Nifty in near term, say analysts

Mumbai, Jan 30: Nifty exhibited volatility throughout the day on Tuesday, with a prevailing bearish trend, said Rupak De, Senior Technical Analyst at LKP Securities.

While the Nifty 50 closed Tuesday 216 points, or 0.99 per cent, lower at 21,522.10, the Sensex ended 802 points, or 1.11 per cent, down at 71,139.90

The daily chart indicates the formation of a dark cloud cover, implying a bearish outlook in the near term. Support is situated at 21,500 on the lower end. A significant decline below this level could potentially initiate a correction in the market. Conversely, sustained trades above 21,500 might lead to an upward movement in the market, De said.

Vinod Nair, Head of Research at Geojit Financial Services, said investors exhibited a reversal in strategy, adopting a cautious approach in anticipation of the upcoming FOMC meeting and interim budget (Feb 1) amid persistent concerns regarding elevated valuations and escalating tensions in the Middle East.

Further, the trend weakened in EMs as liquidation order for a major Chinese real-estate firm dampened the sentiment. The US Fed is anticipated to maintain a rate pause, close attention will be paid to any hints regarding a potential rate cut in the month of May, he said.