The broader indices underperformed the main indices and snapped two-week gaining streak in the week ended August 29 with BSE Small and Mid-cap indices falling 3 percent each, while Large-cap index shed 2 percent.
For the week, the BSE Sensex index shed 1,497.2 points or 1.84 percent to close at 79,809.65 and Nifty50 lost 443.25 points or 1.78 percent to end at 24,426.85. However, in the month of August, Sensex fell 1.7 percent, and Nifty index was down 1.4 percent.
The Foreign Institutional Investors (FIIs) extended their selling on 9th consecutive week, as they sold equities worth Rs 21,151.90 crore. On the other hand, Domestic Institutional Investors (DII) continued their buying in 20th consecutive week, as they bought equities worth Rs 28,645.04 crore.
In this month of August, FII offloaded equities worth Rs 46,902.92 crore and DII bought equities worth Rs 94,828.55 crore.
On the sectoral front, Nifty Realty index shed more than 4 percent, Nifty Defence index fell 4 percent, Nifty PSU Bank index shed 3.5 percent, Nifty Oil & Gas index slipped 3 percent. On the other hand, Nifty FMCG index added 0.7 percent.
"In the last week, the benchmark indices witnessed selling pressure at higher levels. The Nifty ended 1.8 percent lower, while the Sensex declined by 1500 points. Among sectors, the Capital Market Index lost the most, declining by 7.5 percent, whereas some buying was seen in selective FMCG stocks, resulting in the FMCG Index gaining 0.67 percent. Technically, on weekly charts, it has formed a long bearish candle and also a lower top formation, which is largely negative," said Amol Athawale, VP technical Research, Kotak Securities.
"We are of the view that the market's short-term outlook remains weak, but a fresh selloff is possible only if the level of 24,330/79700 is breached. On the other hand, above 24,550/80500, the pullback rally could continue up to the 20-day SMA (Simple Moving Average) or 24,700/81000 and 24,800/81300," he added.
"On the downside, if the market falls below 24,330/79700, it could slip to the 200-day SMA or around 24,070/78900. Further downside may also continue, which could drag the market down to 23,900/78400."
"For Bank Nifty, if it sustains above 53,500, a pullback move is likely to continue toward 54,500–55,000–55,800. Conversely, if it falls below 53,500, it could decline toward the 200-day SMA or around 53,000–52,800," Athawale added further.
The BSE Small-cap index shed 3 percent with Blue Jet Healthcare, Vishnu Prakash R Punglia, Angel One, Sterlite Technologies, Panama Petrochem, Ethos, Shankara Building Products, Shiva Cement, Sai Life Sciences, Nelcast, Technocraft Industries (India), Gokaldas Exports, GOCL Corporation, Faze Three, Ramky Infrastructure falling between 10-13%.
On the other hand, Sadhana Nitrochem, Kabra Extrusion Technik, Rattanindia Enterprises, Permanent Magnets, Jindal Poly Films, Timex Group India, Edelweiss Financial Services, Advanced Enzyme Technologies, Apollo Micro Systems, Kolte-Patil Developers, S H Kelkar & Company, Seamec added between 10-21%.
Where is Nifty50 headed?
Ajit Mishra – SVP, Research, Religare Broking
The ongoing decline appears to be more sentiment-driven in the absence of fresh positive triggers. Notably, the Nifty is now approaching a critical support zone at 24,250–24,350. Meanwhile, the banking index has almost tested its major support around the 200 DEMA at 53,600, which could prompt some pause or even a rebound. That said, participants should continue to adopt a cautious approach, with greater emphasis on risk management, until there are clear signs of a consolidation.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities
The downside momentum continued in the market on Friday and Nifty closed the day lower by 74 points amidst choppy movement. A small negative candle was formed on the daily chart with long upper shadow. Technically, this market action indicates weak bounce and sell on rise in the market. Hence, one may expect some more weakness in the coming week.
Nifty is nearing a crucial lower support around 24300-24200 levels (previous swing low and 200day EMA), but a sustainability above the said supports could be doubtful. Hence, a decisive move below 24200, the Nifty could slide down to the next lows of around 24000-23900 levels in the near term. However, a strong upside momentum above the hurdle of 24700 could change the sentiment in favor of bulls.
Rupak De, Senior Technical Analyst at LKP Securities
The RSI is in a bearish crossover, indicating sustained weakness. In the short term, the trend may remain weak, potentially dragging Nifty towards the 200 DMA placed at 24,071. On the lower end, support is placed at 24,400/24,150, while on the higher end, resistance is seen at 24,650. A “sell on rise” strategy remains preferable as long as the index stays below 24,850.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
