Nifty, Sensex stuck in tight range while all sectoral indices fall into red, India VIX sinks 3%

The Nifty 50 and Sensex swung between the green and the red through the session on Tuesday, July 22, as investors remained cautious. The lack of strong directional cues led to the headline indies taking a breather, while sharp stock-specific moves were seen instead.

At close, the Sensex was down 13.53 points or 0.02 percent at 82,186.81, and the Nifty was down 29.80 points or 0.12 percent at 25,060.90. About 1,552 shares advanced, 1,998 shares declined, and 124 shares were unchanged.

All sectoral indices traded in a sea of red, with the Nifty Pharma, Nifty Media, Nifty Realty, along with Nifty PSU Bank seeing the highest losses, sinking up to two percent. Even the broader markets dragged, with the Nifty Midcap 100 index slipping 0.6 percent, while its smallcap peer fared slightly better, sinking only 0.3 percent.

Fear and nervousness in the markets continue to cool, as indicated by the India VIX index, which fell 3.5 percent to 10.82.

There are two factors that are providing this resilience to the market. One, the mother market US is bullish with the S&P having set new records ten times this year. This bullishness is providing psychological support to the bulls, said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

He added that the second factor is the liquidity support to the market, which continues unabated. "DIIs, flush with funds, have been buyers in 14 out of the 15 trading days this month. This has more than neutralised the FII selling in 10 out of the 15 trading days of the month. This trend in the institutional activity is significant."

On the technical front, Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities said, "The short-term structure remains downward-biased, and the 25,200–25,320 zone has now emerged as a strong supply area. However, as long as the index sustains above 24,800, a window remains open for supportive buying to continue. A decisive close above 25,250 is required to reverse the short-term bearish undertone and turn the tide in favour of the bulls."

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