The Sensex closed 78 points, or 0.09%, lower at 84,481.81, while the Nifty 50 settled at 25,815.55, down 3 points, or 0.01%. The BSE Midcap index ended with modest gains of 0.05%, while the Smallcap index fell 0.28%.

IT stocks, including Infosys, TCS, and Tech Mahindra, were key support for the Sensex. On the other hand, select heavyweights such as HDFC Bank, Sun Pharma, and Bharti Airtel remained the top drags on the index.

Two stock recommendations by MarketSmith India for 19 December:

Buy: Shriram Finance Ltd (current price: ₹865)

• Why it’s recommended: Strong presence in used commercial vehicle and MSME lending, consistent growth in AUM with diversified loan book, high-yield asset portfolio supporting strong NIMs, improved asset quality and declining GNPA/NNPA trends, strong capital adequacy and healthy provisioning buffers, robust parentage (Shriram Group) and experienced management, and cross-selling potential after Shriram Group restructuring
• Key metrics: P/E: 19.11, 52-week high: ₹876.90, volume: ₹1,086.96 crore
• Technical analysis: Trending above all its key moving averages, bullish momentum intact
• Risk factors: High exposure to the self-employed and informal segment; asset quality sensitive to economic cycles, elevated credit costs in case of macro slowdown, competition from banks and NBFCs in key lending segments, interest rate volatility impacting borrowing cost and margins, dependence on vehicle finance—cyclical industry risks, and regulatory changes affecting NBFCs may impact business model
• Buy at: ₹855–870
• Target price: ₹975 in two to three months
• Stop loss: ₹810

Buy: Canara HSBC Life Insurance Co. Ltd (current price: ₹127.50)

• Why it’s recommended: Strong bancassurance network driven by long-term partnerships, and diversified product mix across protection
• Key metrics: P/E: N/A; 52-week high: ₹128.30; volume: ₹ 19.50 crore
• Technical analysis: downward sloping trendline breakout
• Risk factors: High dependence on bancassurance channels, regulatory and policy risks
• Buy at: ₹126–128
• Target price: ₹142 in two to three months
• Stop loss: ₹ 121

Nifty 50: How the index performed on 18 December

Indian equities ended marginally lower on Wednesday, with the Nifty 50 closing almost flat at 25,815, slipping 3 points amid a choppy session marked by global caution ahead of key central-bank commentary. The index traded within a narrow band of 25,726–25,902, reflecting hesitant risk appetite after recent record highs.

Broader market breadth was weak, with 1,827 stocks declining vs. 1,273 advancing, indicating pressure outside the headline indices. On the sectoral front, IT outperformed sharply, rising 1.2% on continued optimism around improving US tech spending, while Consumer Durables and Financial Services also posted modest gains. On the downside, Auto, Pharma, and FMCG saw profit-taking, and Media remained under pressure. Metals were slightly positive, supported by stable commodity cues.

Nifty 50 extended its consolidation phase and marginally closed below the 50-DMA, signaling a mild deterioration in short-term momentum as the index struggles to regain directional strength. Price action continues to drift within a broad rising channel, but the recent candles reflect lower highs and subdued follow-through buying, indicating a tempering of bullish sentiment. The RSI remains in a downward trajectory, hovering in the mid-40s, reinforcing the loss of momentum and highlighting a developing bearish divergence that has been unfolding over recent weeks. Meanwhile, the MACD stays in negative territory with the signal line positioned above the MACD line, maintaining a bearish crossover and confirming the ongoing softness in momentum.

According to O’Neil’s methodology of market direction, the market status has shifted to a “Confirmed Uptrend” as it decisively surpassed its previous rally high of 25,670 to register a new 52-week.

The index ended the session on a flat note, closing marginally below its 50-DMA, indicating a pause in short-term momentum. On the downside, 25,700 remains the initial support, while 25,300 continues to serve as a critical area for sustaining the broader uptrend and maintaining market stability. On the upside, a decisive close above 26,300 would meaningfully improve the technical structure and set the stage for a continuation of the rally toward 26,500–26,700 in the near term.

How did the Nifty Bank perform?

Nifty Bank opened on a weak note and, after a brief attempt to move into positive territory, quickly slipped back into the red. Throughout the session, the index displayed limited directional conviction and ultimately ended almost unchanged, losing just 14 points.

On the daily chart, it has now formed a third consecutive bearish candle, indicating sustained selling pressure at higher levels. The index opened at 58,712.70, touched an intraday high of 59,211, and recorded a low identical to its opening level before closing at 58,912.85. The persistent inability to hold intraday gains suggests cautious market sentiment, and traders may look for clearer cues before expecting a decisive breakout or reversal.

Nifty Bank is still in a mild consolidation phase. Today’s candle shows uncertainty right near the short-term trendline that has guided the index since late October. Despite intraday swings, the index held above this trendline, indicating that buyers are still attempting to protect the current structure, even as overall momentum cools.

The RSI has dipped below its midpoint to around 50 and is now moving lower, suggesting momentum is weakening, and sentiment is turning more neutral to slightly negative. The MACD has also given a bearish crossover with growing histogram bars, signalling that the strong upward momentum seen in recent weeks is starting to fade.

The index continued to decline and closed below 59,000. However, the pullback still looks healthy and is in line with the overall uptrend. Some short-term profit-booking may continue, but any move toward the 50-DMA near 58,300 is likely to attract fresh buying.

A quick recovery and close above the 21-DMA would help restore bullish momentum and strengthen the broader positive outlook. On the downside, 58,800–58,000 should act as a strong support zone, backed by steady buying interest across major banking stocks. Sectoral breadth is also improving, which supports the underlying trend. If the index manages to move above key resistance levels, it could attract more institutional participation and accelerate the next leg of the uptrend.

MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O’Neil. You can access a 10-day free trial by registering on its website.

Trade name: William O’Neil India Pvt. Ltd.

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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.