Sensex and Nifty Start Flat with Volatility Spike; Market Experts Predict Further Consolidation

Nifty and Sensex are likely to see further consolidation, noted experts.

Dalal Street saw another flat start in trade on Friday, July 4, as the equity benchmarks Nifty 50 and Sensex continued their consolidation phase.

At 09:30 a.m., the Sensex was up 73.73 points or 0.09 percent at 83,313.20, and the Nifty was up 17.60 points or 0.07 percent at 25,422.90. About 1898 shares advanced, 879 shares declined, and 136 shares unchanged.

The market sentiment is mildly indecisive, according to experts, following a cautious close in the previous trading session. Sectoral indices on the NSE were trading mixed, with modest moves across the board.

Nifty FMCG led the gains, rising 0.4 percent, followed by Nifty Media up 0.5 percent and Nifty Realty, which added 0.3 percent. Nifty PSU Bank, Nifty Infra, and Nifty Pharma also posted mild gains in early trade. On the other hand, Nifty Auto and Nifty Metal saw marginal losses, slipping 0.2 percent, respectively.

The sentiment in the broader markets was slightly more positive, with the Nifty Midcap 100 and Nifty Smallcap 100 rising around 0.1 percent each.

India’s market regulator has barred Jane Street Group from participating in the country’s securities market, delivering a significant blow to the US-based trading firm, which earned over $2.3 billion in net revenue from equity derivatives in India last year.

Foreign institutional investors (FIIs) turned net sellers on July 3, offloading Indian equities worth Rs 1,481 crore. Domestic institutional investors (DIIs), meanwhile, provided a cushion by buying Rs 1,333 crore worth of shares, according to provisional data from the NSE.

Asian shares traded in a tight range Friday as renewed trade tensions ahead of next week’s deadline for higher levies outweighed a record-extending rally in US stocks.

For day traders, 25,500 is a crucial level to watch. As long as the market trades below these levels, the weak sentiment is likely to continue. On the upside, above 25,500, we can see an intraday bounce towards 25,600. A successful breakout of the 25,600 resistance zone can push the market towards 25,670.

In the options space, sentiment has turned slightly defensive, with call writers becoming increasingly aggressive at higher levels—highlighting rising supply. On the other hand, put writers have begun scaling back their positions, pointing to expectations of a range-bound to mildly corrective setup.

In the current environment of heightened volatility and mixed cues, traders are advised to adopt a cautious 'buy-on-dips' strategy, especially when trading with leverage. Booking partial profits during rallies and using tight trailing stop-losses will help manage risk effectively.

According to the source: Moneycontrol.