The broader indices underperformed the main indices and continued the fall in the third consecutive week, led by volatility amid better auto numbers, mixed earnings, and persistent FII selling after the US imposed additional tariffs on India.
For the week, BSE Large-cap and Mid-cap indices shed 1 percent each, and the BSE Small-cap index slipped nearly 2 percent.
For the week, the BSE Sensex index shed 742.12 points or 0.92 percent to finish at 79,857.79, while Nifty50 shed 202.05 points or 0.82 percent to end at 24,363.30.
The Foreign Institutional Investors (FIIs) extended their selling in their sixth consecutive week, as they sold equities worth Rs 10,652.47 crore, despite remaining buyers in the final day of the week.
On the other hand, Domestic Institutional Investors (DII) extended their buying in the 16th week, as they purchased equities worth Rs 33,608.66 crore.
In this month on August so far, FII sold equities worth Rs 14,018.87 crore and DII bought equities worth Rs 36,795.52 crore.
On the sectoral, Nifty Pharma, Realty, FMCG, Healthcare, lost 2 percent each, while PSU Bank, media, and metal rose 0.5-1.5 percent.
"Since July, the Indian equity market has remained in a phase of consolidation, reflecting weakening investor sentiment due to trade-aligned challenges. Concerns over steep US tariff rates and underwhelming quarterly earnings have dampened market confidence. Persistent selling by FIIs, particularly in pharma stocks with significant US exposure, underscores this cautious outlook. The continued depreciation of the INR has also added to investor anxiety," said Vinod Nair, Head of Research, Geojit Investments.
"Despite these headwinds, downside risks were partially cushioned by RBI’s reaffirmation of macroeconomic stability, its optimistic stance on domestic growth, and early signs of easing inflation. Looking ahead, market volatility is expected to persist. While risks from US trade tensions and sustained FII outflows remain, potential support from DIIs could offer some relief."
"Upcoming inflation data from both India and the US will be critical in shaping investor expectations. Market participants are advised to closely track global trade developments and corporate earnings, with a strategic focus on domestic consumption-driven sectors that are better positioned to withstand short-term volatility," he added.
The BSE Small-cap index slipped nearly 2 percent with PG Electroplast, Kitex Garments, Unichem Laboratories, Morepen Laboratories, Advait Energy Transitions, KR Rail Engineering, Faze Three, and Advanced Enzyme Technologies falling between 15-24 percent.
However, Sarda Energy and Minerals, Timex Group India, Sanghvi Movers, Zinka Logistics Solutions, Centum Electronics, KRBL, Baazar Style Retail, Godfrey Phillips India, and Entertainment Network India gained between 12-21 percent.
Where is Nifty50 headed?
Ajit Mishra – SVP, Research, Religare Broking
Lingering uncertainty over the tariff situation, coupled with continued selling by FIIs, has been weighing on market sentiment. The medium-term moving average—the 100-day EMA—near the 24,600 mark, which earlier acted as support, is now serving as an immediate resistance. A close below 24,450 signals the continuation of the corrective phase, with a potential retest of the long-term moving average—the 200-day EMA—near 24,200.
Traders are advised to align their positions accordingly, with greater emphasis on risk management."
Rupak De, Senior Technical Analyst at LKP Securities
The Nifty moved southward as it failed to sustain above the 50 EMA on the hourly chart, indicating prevailing selling pressure. Moreover, the index closed below the crucial support level of 24,400, highlighting the strength of the bears.
Sentiment was already tilted in favour of the bears, with the index forming a lower-top, lower-bottom pattern. The short-term trend remains weak, with potential downside towards 24,150–24,200. On the higher side, resistance is seen at 24,475–24,500.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities
After witnessing a sustainable bounce back from the lows on Thursday, Nifty witnessed sharp selloff on Friday.
A long bear candle was formed on the daily chart that completely negated the bullish sentiment created on Thursday. A long negative candle has been formed on the weekly chart which is for the sixth consecutive week on the trot. The formation of long upper shadows in the last 4-5 weekly candles signals sell on every rise in the market.
The underlying trend of Nifty continues to be weak. The next lower levels to be watched around 24200-24000 by next week. However, any pullback up to the hurdle of 24500 could be a sell on rise opportunity.
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