Trade Setup March 12: Markets extend losses as selling pressure persists

Indian equity markets extended their decline on Wednesday as selling intensified near the 24,300 level. Analysts say the Nifty 50 may test its recent swing low of 23,697, signalling a cautious outlook for the near term.

The Nifty 50 remained under pressure on Wednesday as bears maintained control of the market. Selling intensified around the 24,300 mark, dragging the index lower and briefly pushing it below the psychologically important 24,000 level during the trading session.

The index opened on a largely flat note but gradually extended its losses throughout the day. Minor intraday recoveries were repeatedly met with fresh selling, indicating persistent weakness in the broader market sentiment.

Rising global energy prices and concerns about tightening natural gas supplies added to the pressure on equities, prompting investors to adopt a cautious stance.

Energy Concerns Weigh on Market Sentiment

Investor sentiment was also affected by developments in the energy market. Brent crude surged to nearly $92.8 per barrel, marking a four-year high amid supply disruptions linked to escalating geopolitical tensions in West Asia.

The tensions between the United States and Iran have raised concerns about global energy supplies, particularly natural gas and crude oil availability.

Domestically, gas-related stocks remained in focus after the Indian government prioritised LPG supply and encouraged higher domestic output to address potential shortages.

Adding to inflationary concerns, LPG prices were increased by more than ₹60 for a 14.2-kg non-subsidised household cylinder across major Indian cities.

Government Infrastructure Push Provides Sectoral Boost

Despite broader market weakness, infrastructure-linked sectors received some support after the Union Cabinet approved the extension of the Jal Jeevan Mission under Jal Jeevan Mission 2.0.

The programme carries an estimated outlay of ₹8.69 lakh crore, aimed at expanding rural drinking water infrastructure across the country.

The initiative is expected to generate opportunities for companies in capital goods, pipes and fittings, engineering procurement and construction (EPC), and infrastructure development.

Large-scale investments in water pipelines, pumping systems, treatment plants and rural distribution networks could improve order inflows and revenue visibility for companies involved in water infrastructure and project execution.

Technical Outlook Remains Weak

Market analysts remain cautious about the near-term direction of the benchmark index.

According to Nagaraj Shetti, the near-term trend for the Nifty 50 appears to have turned negative following the recent rebound.

He expects the index to slip below its recent swing low of 23,697 in the short term, with immediate resistance around 24,050.

Meanwhile, Rupak De highlighted that the market’s technical structure has weakened further.

He noted that the gap between the 50-day moving average and the 200-day moving average is narrowing, raising the risk of a Death Cross.

This pattern occurs when the 50-day moving average falls below the 200-day moving average and is often considered a bearish signal indicating potential downside.

Key Support and Resistance Levels

According to De, support levels for the index are placed at 23,700 and 23,300, while resistance stands near 24,100.

Similarly, Sudeep Shah identified the 23,750–23,700 zone as an immediate support band for the Nifty.

He warned that a sustained break below this range could trigger further declines towards 23,500 and eventually 23,300 in the near term.

With global energy uncertainties and weakening technical indicators, traders are expected to remain cautious in the upcoming session as the market closely watches the crucial 23,697 support level.