Trade Setup for March 5: Can Nifty maintain its resilience amid tariff uncertainty?

Despite initial volatility, the Nifty managed to hold above the critical 22,000 level on Tuesday, even as global markets remained under pressure following new tariffs imposed by the U.S. While the index saw a gap-down opening and briefly dipped below 22,000, it staged a modest recovery, marking its 10th consecutive session of losses—the longest losing streak on record.

The broader markets fared better, with the Nifty Midcap index rebounding 1,000 points for the second consecutive session, while small-cap stocks outperformed.

Foreign institutional investors (FIIs) continued their selling spree in the cash market, while domestic institutions remained net buyers—a trend that has been consistent since early February.

Sectoral Highlights

Defence Stocks: Companies like Bharat Dynamics Ltd (BDL) and Bharat Electronics saw gains of 3-5%, driven by a rally in European defence stocks following the European Commission's “Rearm Europe” strategy.

Oil Marketing Companies (OMCs): Stocks in this sector rose as crude oil prices dropped to a three-month low.

Banking Sector: The Nifty Bank index outperformed, led by gains in HDFC Bank and ICICI Bank. State Bank of India (SBI) surged 3% following a double upgrade from Citi.

Key Support and Resistance Levels

Market experts suggest that while Nifty has defended 22,000 on a closing basis for two consecutive sessions, its ability to sustain this resilience remains uncertain.

Immediate Support: 21,950 (Tuesday’s low)

Critical Support Zone: 21,800-22,000

Immediate Resistance: 22,260

Higher Resistance Levels: 22,250 and 22,450

A decisive move above 22,260 could trigger further upside, while a break below 21,800 may shift the market sentiment to bearish.

For the Nifty Bank, support remains at 47,800, while resistance is seen at 48,800 and 49,000. Until a breakout above 48,800 is confirmed, upward momentum is likely to remain subdued.

F&O Market Trends

Stocks with Fresh Long Positions: Titagarh (+2.09% price, +64.36% open interest), CESC (+4.42%, +6.91%), Max Financial (+1.58%, +6.59%)

Stocks with Fresh Short Positions: Tata Technologies (-4.33%, +56.66%), IREDA (-3.16%, +46.76%), IIFL Finance (-2.67%, +6.29%)

Stocks to Watch for March 6

BSE: NSE has revised the weekly expiry schedule to Monday (from Thursday), effective April 4.

Grasim Industries: Begins commercial production of Birla Opus paints in Mahad, Maharashtra, expanding its installed capacity to 1,096 million litres per annum.

Biocon: Subsidiary receives final USFDA approval for Lenalidomide Capsules & Dasatinib tablets and tentative approval for Rivaroxaban tablets.

Power Grid: Awarded three inter-state transmission projects under the Build, Own, Operate, and Transfer (BOOT) model.

GE Vernova T&D: Secures ₹500 crore worth of orders from Power Grid.

Ola Electric: Engages with authorities over a milestone delay flagged by IFCI.

RVNL: Wins a ₹729.8 crore contract from HPSEBL.

JSW Energy: Receives CCI approval for acquiring KSK Mahanadi Power Company.

ONGC Green: Acquires a 100% stake in PTC Energy for ₹925 crore, gaining 288.8 MW of wind energy assets.

Welspun Specialty: Becomes the lowest bidder for a ₹231.77 crore BHEL project to supply stainless steel seamless boiler tubes for supercritical thermal power projects.

With global uncertainties mounting due to retaliatory tariffs and concerns over a potential U.S. recession, market sentiment remains fragile. Traders should watch global cues closely while focusing on stock-specific opportunities.