Indian Stocks Flat Amid Volatility: Why 600-Point Swings Signal Caution

Investors remained cautious as markets awaited updates on the potential US-India trade deal and the outcome of the Bihar elections, with counting scheduled for Friday.

Sensex closed the day at 84,478.67 points, up just 12.16 points or 0.014 per cent, while Nifty closed at 25,884.90 points, up just 9.10 points or 0.035 per cent, respectively. For Sensex, the intraday high and low were 84,919 points and 84,253 points, respectively.

Although marginally, the Nifty and Sensex ended higher for the fourth consecutive session. Analysts say profit-booking erased early gains despite optimistic global and domestic cues.

"Given the prevailing volatility and mixed global backdrop, traders are advised to maintain a cautious buy-on-dips approach, especially when using leverage. Partial profit booking during rallies and the use of tight trailing stop-losses will be vital for effective risk management," Amruta Shinde, Technical & Derivative Analyst at Choice Equity Broking Private Limited, said.

According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, the market requires additional triggers to reach new record highs.

"With the outcome of the Bihar polls largely discounted by the market, there are no political triggers that can push the market significantly higher. The reverse might happen if the actual poll results turn out to be different from the exit polls," Vijayakumar said today.

The important economic factors that have to be watched for is a possible India-US trade deal removing the penal tariffs and reducing the reciprocal tariffs.

"The decline in October retail inflation in India to 0.25% indicates the possibility of a rate cut from the MPC in December. But the monetary policy transmission turning weak has become a challenge for the RBI," added Vijayakumar. "In the near-term the market is likely to consolidate and then respond to triggers when they happen. Positive triggers happening simultaneously can lead to short-covering pushing the market sharply up. But sustained uptrend would be challenging given the FII selling and elevated valuations."

So far in 2025, Sensex and Nifty accumulated returns of about 8 per cent, on a cumulative basis.

In 2024, Sensex and Nifty accumulated a growth of about 9-10 per cent each. In 2023, Sensex and Nifty gained 16-17 per cent, on a cumulative basis. In 2022, they gained a mere 3 per cent each.

"The benchmark index Nifty maintained its bullish undertone for most of the trading session, supported by positive sentiment and selective buying across key sectors. However, the momentum faltered near the psychological 26000 mark, triggering a wave of profit booking that erased early gains. As a result, the index slipped from its intraday highs and eventually closed below 25900, registering a marginal uptick of 0.01%," said Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities.

- ANI