Commenting on Nifty technical outlook, experts said that the Nifty tested its broken weekly 200-SMA zone at 22,580–22,600 but closed below it. 

“A sustained move above this band could extend the recovery toward 22,800, while rejection would keep 22,400 as the immediate support,” analysts stated.

“The rebound can extend if the Nifty closes above 22,600 with broader participation and Bank Nifty crosses 55,175. Failure to clear these levels, especially alongside renewed strength in crude or a hawkish RBI outcome, could bring selling pressure back into the market,” market watchers added.

Market sentiment improved after global stocks moved higher on expectations that the US Federal Reserve may not need to pursue faster interest rate hikes, easing concerns that had weighed on equities in recent sessions.

Among the Nifty constituents, ITC, BSE and Tata Motors Passenger Vehicles emerged as the top gainers, helping drive the market’s recovery.

The broader market also participated in the rally. The Nifty MidCap index gained 0.67 per cent, while the Nifty SmallCap index rose 0.47 per cent.

Sectorally, consumer-focused segments led the gains. The Nifty Consumer Durables and Nifty FMCG indices outperformed the broader market as investors accumulated stocks in these sectors.

On the other hand, healthcare-related counters lagged. The Nifty Healthcare and Nifty Pharma indices ended as the weakest-performing sectoral gauges during the session.

“The market is nearing an important juncture; a rebound is likely; however, the current risk-off sentiment may tempt investors to book profits until a fresh catalyst emerges,” market watchers stated.

“Going ahead, investors should focus on earnings visibility and accumulate selectively on declines rather than chase the rebound,” analysts added.

Meanwhile, Rupee traded weak near 96.30, with markets turning cautious ahead of the RBI policy decision on Wednesday.