Stock market update: Indian equities closed lower for a third consecutive session on Wednesday, weighed down by a sudden leadership shake-up at the Tata group and persistently elevated crude oil prices. The Nifty 50 slipped 35.75 points, or 0.15%, to close at 24,435.95, while the Sensex fell 187.90 points, or 0.24%, to close at 77,966.35, having fallen nearly 1% intraday before recovering some ground.
Sentiment turned sharply negative after Tata Sons Chairman N. Chandrasekaran said he would not seek reappointment when his term ends in February 2027, triggering a broad sell-off across Tata group stocks. Tata Consultancy Services tumbled as much as 6% intraday, while Tata Motors, Tata Steel, Tata Consumer, and Titan also came under pressure. Adding to the weakness, Brent crude remained near $89-90 per barrel amid unresolved US-Iran tensions over the Strait of Hormuz, while the rupee weakened beyond 95.3 against the dollar.
Metal and PSU banking stocks, led by Hindalco and State Bank of India, provided some counterbalance. Market breadth stayed negative throughout the session, with 1,504 stocks advancing, 1,868 stocks declining, and 104 remaining unchanged on National Stock Exchange.
Two stock recommendations by MarketSmith India:
Buy: AU Small Finance Bank Ltd (current price: ₹1,085)
Why it’s recommended: Strong retail banking franchise, diversified secured loan portfolio, healthy deposit growth, growing CASA franchise, strong asset quality, healthy capital adequacy, strong vehicle finance presence, expanding branch network, beneficiary of financial inclusion, improving digital banking capabilities, growing customer base, strong execution track record, improving operating leverage, diversified geographic presence, and long-term credit growth potential.
Key metrics: P/E: 28.10 | 52-week high: ₹1,105.90 | Volume: ₹169.28 crore
Technical analysis: Cup-with-handle base breakout
Risk factors: Exposure to vehicle finance cycle, asset quality deterioration risk, credit cost volatility, interest rate cycle impact, margin pressure from deposit costs, intense banking competition, regulatory risks for SFBs, economic slowdown affecting borrowers, competition for low-cost deposits, integration and execution risks, rural and MSME credit exposure, technology and cybersecurity risks, slower loan growth risk, earnings volatility during stress periods, and valuation risk at premium multiples.
Buy: ₹1,074-1,090
Target price: ₹1,250 in two to three months
Stop loss: ₹1,030
Buy: Bharat Heavy Electricals Ltd (current price: ₹420)
Why it’s recommended: Strong power equipment franchise, large order book visibility, beneficiary of power sector capex, strong government backing, thermal power ordering revival, diversified engineering capabilities, opportunities in railways and defence, strong domestic manufacturing base, beneficiary of infrastructure spending, high entry barriers in heavy engineering, improving execution potential, renewable and nuclear opportunities, established customer relationships, operating leverage potential, and long-term electricity demand growth.
Key metrics: P/E: 57.69 | 52-week high: ₹446.50 | Volume: ₹602.87 crore
Technical analysis: Reclaimed its 21-DMA
Risk factors: Project execution delays, working capital intensive business, dependence on government orders, slow customer payment cycles, margin pressure on large projects, high thermal power exposure, raw material cost volatility, order inflow volatility, PSU-related operational constraints, intense industry competition, regulatory and policy risks, capacity utilization risk, supply chain disruptions, earnings recovery execution risk, and valuation risk after strong re-rating.
Buy at: ₹416-422
Target price: ₹470 in two to three months
Stop loss: ₹397
Nifty 50: How the benchmark index performed on 12 August:
Indian equities ended a volatile session modestly lower on Wednesday, with the Nifty 50 closing at 24,435.95, down 35.75 points or 0.15%. The index opened at 24,472.45 and initially rose to 24,473.30 before selling pressure dragged it to an intraday low of 24,265.95.
However, a strong late-session recovery, helped the Nifty recoup most of its losses and close near 24,436. Market breadth remained weak, indicating that the recovery was not broad-based. A total of 1,504 stocks advanced, 1,868 declined, and 104 remained unchanged, resulting in an advance-decline ratio of approximately 0.81:1.
On the sectoral front, PSU Banks (+2.05%) were the standout performers, followed by Media (+1.05%) and Metal (+0.54%), while IT (-1.54%) was the biggest drag, with FMCG (-0.73%) and Auto (-0.32%) also ending lower.
The Nifty 50 witnessed intraday volatility but staged a meaningful recovery from lower levels, indicating buying interest on declines. Notably, the index recovered after taking support near the confluence of its downward-sloping trendline and the 21-DMA, reinforcing the importance of this dynamic technical zone. The RSI is at 54.81, remaining above the neutral 50 mark but slipping below its signal average of 57.03, suggesting that positive momentum has moderated. Meanwhile, the MACD remains in positive territory and above the zero line.
However, the narrowing gap between the MACD and signal lines, along with a fading positive histogram, indicates weakening upside momentum.
Technically, 24,300-24,250 remains the immediate support area for Nifty 50, and a decisive breach below this band could intensify selling pressure, potentially dragging the index toward 24,000, which broadly coincides with the 50-DMA. On the upside, 24,675-24,770 represents the first key resistance zone, encompassing the recent swing high and the 200-DMA.
A sustained breakout and close above this band would signal an improvement in the underlying price structure and could pave the way for an extension toward 24,900–25,000. Until a decisive breakout occurs on either side, the index is likely to remain range-bound, with price action around these key technical levels determining the near-term directional bias.
How did the Nifty Bank perform yesterday?
The Nifty Bank opened on a positive note at 57,391.80 and witnessed sustained buying interest through the session. The index tested an intraday low of 57,254.00 before rebounding strongly and extending gains toward the day's high.
The index opened at 57,391.80, touched a high of 57,885.85, a low of 57,254.00, and closed at 57,885.85, gaining 439.60 points or 0.77%. Importantly, the close at the session high reflects strong buying momentum into the closing bell. Price is trading above the 21 SMA at 57,535.21, the 200 SMA at 57,478.29, and 50 SMA at 57,203.14, maintaining a constructive short-term structure. Recent price action resembles a tight consolidation with higher lows, suggesting accumulation and potential breakout preparation.
Momentum indicators are gradually becoming favourable. The RSI stands at 54.25, above its signal average of 51.65 and comfortably above the neutral 50 mark, indicating improving bullish momentum without entering an overbought zone. The RSI structure suggests buyers are regaining control, although a move above 60 would provide stronger confirmation of momentum expansion. Meanwhile, the MACD remains largely flat near the zero line, with the MACD and signal lines closely aligned, indicating limited directional momentum and an ongoing phase of consolidation. A decisive bullish crossover accompanied by histogram expansion would strengthen the breakout case. Overall, momentum is positive but still requires confirmation from stronger price follow-through.
On the technical front, immediate support is seen around 57,200-57,500, where the 21-SMA, 200-SMA, and 50-SMA form an important support cluster. Below this zone, 56,800–56,500 becomes the next downside cushion, while the 100-SMA near 55,832 represents a broader positional support. Resistance is initially seen around 58,000-58,200, followed by 58,500-59,000. A sustained close above 58,200 could trigger an extension toward 58,500-59,000 over the coming sessions.
Conversely, failure to hold 57,200 could weaken the setup. Fundamentally, the outlook remains sensitive to the RBI’s policy stance, liquidity conditions, and broader interest-rate expectations, all of which directly influence banking-sector valuations and lending dynamics.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O'Neil. You can access a 10-day free trial by registering on its website.
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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.