Sensex, Nifty pare gains as investors book profits after sharp rally

• Sensex and Nifty trimmed early gains as investors booked profits after the benchmarks reached eight-month highs

• At 1:33 pm, Sensex was up 723 points at 81,829, while Nifty gained 186 points to trade at 25,230

• Selling in IT and realty stocks weighed on the rally, with analysts flagging the possibility of further consolidation

India’s benchmark equity indices surrendered part of their early gains on 11 November as profit booking at higher levels and selling in information technology and real estate stocks slowed a rally that had taken the market to eight-month highs.

At 1:33 pm, the BSE Sensex stood at 81,829.32, up 722.67 points, or 0.89 per cent. The NSE Nifty 50 was trading at 25,230.15, a gain of 185.50 points, or 0.74 per cent.

Despite remaining comfortably in positive territory, the Sensex had retreated about 700 points from its intraday peak, while the Nifty slipped below 25,250.

Market breadth remained positive, with 2,732 shares advancing, 1,317 declining and 161 unchanged.

The afternoon pullback followed a steep rise in equities this month. The Nifty and Sensex have gained around 10 per cent and 10.5 per cent, respectively, so far in November, putting them on course for their strongest monthly performance since November 2020 and ahead of emerging market peers.

Those gains prompted some investors to take profits. IT and realty shares moved into negative territory during afternoon trading, while select pharmaceutical heavyweights figured among the biggest Nifty laggards.

Analysts broadly maintained a positive technical outlook, although their estimates of near-term support and resistance varied.

Pabitro Mukherjee, deputy vice-president, research, at Bajaj Broking, was quoted by moneycontrol as saying that the speed of the market’s recovery indicated underlying strength. The Nifty had recovered a nine-week decline from 24,774 to 22,179 in just five weeks, suggesting scope for further gains towards 25,400 and subsequently 25,800.

A sustained move above 25,250 could take the index towards 25,400, he said, identifying immediate support at 24,750–24,850. That range coincides with Monday’s low and the previous week’s breakout area.

Mukherjee placed broader short-term support at 24,000–24,300, saying the outlook would remain positive while the index held above that band.

In the same report, Gaurav Udani, founder of Thincredblu Securities, identified 25,150–25,300 as the immediate support zone and 25,500–25,600 as the next resistance band.

He said the near-term outlook remained favourable above 25,150, while a sustained break beyond 25,600 could allow the rally to extend. However, the sharp opening jump left room for intraday swings and further profit booking.

Udani favoured retaining existing long positions and buying on declines, while cautioning against chasing the initial surge.

Nandish Shah, deputy vice-president at HDFC Securities, was also quoted to saying that the bullish structure remained intact. He identified the next resistance at 25,383 and immediate support at 24,774, corresponding to a previous swing high.

Deepesh Sarawagi, technical research analyst at Choice Broking, pointed to signs that the rally could pause despite the positive trend. The Nifty’s relative strength index stood at 77.88, indicating overbought conditions and the possibility of consolidation.

Sarawagi placed immediate support at 25,000–25,150 and resistance at 25,450–25,500.

The afternoon retreat left both benchmarks with sizeable gains, but highlighted investors’ willingness to book profits after the rapid advance. Sustaining higher levels will be the next test for the rally.

With agency inputs