Nifty touches key 50-DMA level for first time since October 2025: What it means for markets

markets

• Sensex and Nifty hit 50-day moving average, indicating cautious investor sentiment
• Market drop tied to US bill on Russian oil, China import curbs removal
• Experts warn of further weakness if Nifty stays under 26,000 and Sensex under 84,500.

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Indian markets on January 8 slipped to their 50-day moving average for the first time since October, signalling cautious investor sentiment and the possibility of further weakness. Both the Sensex and the Nifty touched the 50-DMA for the first time since October 1, 2024.

The key technical level was tested following a sharp sell-off in benchmark indices. The Sensex declined 1 percent, or 780 points, to close at 84,180, while the Nifty fell 1 percent, or 264 points, to end at 25,877. Earlier in December both the two benchmark indices had briefly moved below this level but failed to sustain the move and recovered in intraday.

Independent analyst Deepak Jasani said that unless the Nifty closes above the 50-day moving average of 26,000, it could signal further weakness in the market, adding that such a move could drag the index toward the 25,460 level.

The decline in Indian markets followed comments by Lindsey Graham indicating progress on a bill aimed at penalising countries that buy Russian oil, which added to market nervousness. Shares of Indian refiners, including Indian Oil Corporation and Hindustan Petroleum, declined. Capital goods stocks also came under pressure after reports related to the removal of import curbs from China, with stocks such as BHEL and Larsen & Toubro falling.

Jasani said recurring negative news across sectors often prompts investors to book profits and move to the sidelines.

Other experts said that as long as the market trades below 26,000 on the Nifty and 84,500 on the Sensex, weak sentiment is likely to persist, with the indices potentially slipping toward the 25,750–25,700 and 84,000–83,700 zones. On the upside, they said a move above 26,000 and 84,500 could extend the pullback toward 26,075–26,100 and 84,800–85,000 levels.

Harsimran Sahni, Head of Treasury at Anand Rathi Global Finance, said the impact for India could extend beyond trade disruptions to broader macroeconomic implications. He said higher tariffs may slow growth by affecting export-oriented sectors, while elevated energy costs could complicate inflation management, potentially prompting policy intervention to manage supply and demand in domestic markets.

Sahni added that such interventions could influence liquidity conditions and borrowing requirements, which may push yields higher. Analysts noted that while India may explore diplomatic engagement or alternative trade arrangements, the proposed tariff highlights rising geopolitical risks to energy security and economic stability.

Global market weakness also weighed on sentiment, as investors tracked developments related to trade, the US economy, and geopolitical risks. Futures on the S&P 500 slipped 0.1 percent as investors assessed intervention by US President Donald Trump in the defence and homebuilding industries. Nasdaq 100 futures underperformed, even after paring earlier losses following a development that would allow Nvidia to sell its H200 chips in China.

Investors are also awaiting US payrolls data due on Friday, after recent indicators presented a mixed picture of the US economy, with employment showing signs of pressure despite resilient business activity. Geopolitical concerns remain elevated, with markets monitoring developments related to Greenland and Venezuela.