Raja Venkatraman recommends three stocks for 23 July

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Stock market recap: Indian equities witnessed an across-the-board selloff on Wednesday, 22 July, with the benchmark indices falling by nearly 1% each, while the mid- and small-cap segments underperformed.

The Sensex crashed 715 points, or 0.92%, to end at 76,755.05, while the Nifty 50 fell 191 points, or 0.79%, to close at 23,996.25. The Nifty Midcap 100 index dropped 1.09%, and Smallcap 100 index crashed 1.54%.

As many as 40 stocks ended in the red in the Nifty 50 index, among which InterGlobe Aviation (IndiGo), Dr. Reddy's Laboratories, and Jio Financial Services ended as the top laggards, falling up to 4%. On the other hand, Bajaj Auto, Nestle India, and Tata Consumer ended as the top gainers in the index, rising up to 6%.

It was the third consecutive day of losses for the benchmarks.

In the three consecutive sessions, the Sensex has declined nearly 1,400 points, or almost 2%, while the Nifty 50, has shed over 300 points, or 1.4%.

Indian equities extended their decline on 22 July, with broad-based selling and profit booking weighing on sentiment.

The Nifty 50 fell 191 points, or 0.79%, to close at 23,996, slipping below the psychologically important 24,000 mark. Immediate support is seen in the 23,950-23,900 zone, with a stronger floor around 23,800, while resistance is placed at 24,100-24,200.

The Sensex dropped 715 points, or 0.92%, to end at 76,755, closing near the day's low. Support is seen at 76,600-76,400, while resistance lies in the 77,000-77,300 range.

Sectoral performance was broadly weak. FMCG (+0.65%) and Auto (+0.18%) were the only sectors to post gains, while Media (-2.68%), Realty (-2.60%) and PSU Banks (-1.80%) led the declines. Mid-cap and small-cap indices fell about 1% and 1.5%, respectively, reflecting a broader risk-off mood.

Although near-term momentum has weakened, the medium-term outlook remains constructive as long as key support levels hold. Traders may consider a cautious buy-on-dips approach near those levels while maintaining strict risk management amid elevated volatility.

The Nifty remains relatively weak, with every rally running into sustained selling pressure, suggesting the broader trend retains a downward bias. Although sector rotation continues, market leadership has become increasingly divergent, limiting the index's ability to move higher.

Bank Nifty remains the key index to watch. HDFC Bank has been under pressure following its first-quarter earnings, weighing on sentiment even if its weakness has not significantly altered the broader market. Earlier expectations of a move towards the upper end of the resistance zone have faded as momentum indicators have weakened. With no meaningful near-term triggers, the index is likely to remain range-bound, delaying any sustained recovery.

For Bank Nifty, the 58,500 level remains crucial. As long as it holds, bulls are likely to attempt a rebound. However, a decisive move above 59,500 would be needed to improve sentiment and revive stock-specific buying. Divergence within the banking space continues, with PSU banks outperforming while private-sector banks remain under pressure, making it difficult for Bank Nifty to stage a meaningful recovery. That weakness could spill over into rate-sensitive sectors such as auto, realty and financials.

Despite Wednesday's intraday recovery attempt, Bank Nifty's inability to reclaim the 58,000 mark suggests upside could remain capped in the near term. Until the banking index shows clearer strength, it is likely to dictate the broader market's direction.

For the Nifty, 24,300 remains the immediate resistance and a key hurdle for any bullish revival. Options open interest also points to strong resistance at higher levels. Traders should watch for a decisive breakout above the 30-minute range on Friday before initiating fresh long positions.

With benchmark indices lacking momentum, the focus is likely to remain on s...