Nifty's Uncertain Path: Can Bulls Overcome Mounting Pressures?
As Nifty breaks below 24,900 and the US trade deal deadline looms, markets face consolidation and uncertainty.
Indian equity markets faced yet another tough session last Friday, with the benchmark Nifty 50 index falling for the second day in a row. The uncertainty surrounding the India-US trade deal and the mixed earnings season has led to caution among investors, ultimately driving the market into a consolidation phase. According to CNBC TV18, the market movements are painting a picture of volatility.
A Challenging Day for Nifty
Friday’s proceedings saw the Nifty 50 index plummet by more than 200 points, finishing the week at 24,837 - marking its lowest level in a month. This decline has been fueled by selling pressure, which erased a crucial support level, denting investor confidence.
Moreover, this development solidifies the fourth straight weekly downfall for the index, with a 0.53% slide. Broader market indices didn’t fare any better as Midcap 100 fell 1.61% and Smallcap 100 dropped 2.10%, reflecting market maladies extending beyond large caps.
Sectoral Analysis: In Present Nifty’s State
Among various sectors, only Nifty Pharma and Healthcare bucked the downward trend, ending in the green. Conversely, sectors like Media, PSU Banks, Oil & Gas, and Metal bore the brunt of the day’s losses, showcasing a broad-based market weakness.
Despite the overall negativity, a selection of stocks including Cipla, SBI Life, and Apollo Hospitals emerged as top gainers, bringing a glimmer of hope amid prevailing market anxieties.
Shifting Focus to Key Earnings
Financial and corporate results are set to steal investors’ attention in the upcoming week. Early on, companies like Kotak Mahindra Bank, IDFC First Bank, Lodha Developers, and Whirlpool of India will announce their results on Monday. As the week progresses, massive figures such as IndusInd Bank and Adani Green Energy will stand under the earnings spotlight.
As stated by Siddhartha Khemka of Motilal Oswal, the market’s consolidation is likely to persist in light of these earnings and continuing foreign institutional investor (FII) outflows.
Breaking Supports: Nifty’s Technical Weakness
Technical analysts weigh in with cautious outlooks. Rupak De of LKP Securities noted the closing below the 50-day Exponential Moving Average for the first time in several sessions as an indicator of a weakening trend. If the Nifty fails to reclaim the critical 24,900 level soon, bulls could face steeper challenges ahead.
Further support was echoed by Nandish Shah of HDFC Securities, pointing to the violation of prior swing lows as a bearish signal. Possible supports lie at 24,700 followed closely by 24,500, while upside resistance is anticipated near 25,000.
What Lies Ahead?
Rajesh Bhosale of Angel One forecasts immediate support near the 89-day EMA at 24,650, stressing that without regaining lost technical levels, the Nifty’s rebound potential remains limited.
In summary, with market indicators suggesting potential shifts and adjustments, and external factors like the India-US trade deal creating a backdrop of uncertainty, traders and investors are closely monitoring the evolving scenario. As the days unfold, the market will evaluate whether bulls can mount a comeback or if bears will continue to dominate.
