Nifty Index Continues Downward Trend
Over the past week, markets experienced a gradual decline of approximately 2%, largely influenced by weak domestic signals. The negative sentiment prevailed from the beginning, aggravated by a continuous increase in the India VIX, indicating heightened volatility.
Moreover, the downturn in specific major stocks in response to their earnings contributed to the downward pressure as the week progressed. Ultimately, both the Nifty and Sensex, the primary benchmark indices, closed near their lowest points for the week at 22,055.20 and 72,664.47 respectively.
Key sectors such as financials, energy, and metals witnessed notable losses, while FMCG, automotive, and IT sectors demonstrated resilience, mitigating the overall impact. Broader indices also saw declines ranging from 2.7% to 5%.
Despite the negative local sentiment, the resilience observed in global markets, particularly in the US, played a crucial role in moderating the pace of decline. It’s crucial for investors to closely monitor both global market performance and local factors for market cues.
The outlook indicates a continuation of the negative sentiment in the Nifty index, following its breakout from the rising channel on the daily chart. Attention is now directed towards the 21,800 level as a critical reference point for the Nifty index, with a potential breach signaling a move towards the 21,200-21,400 range.
Conversely, a rebound would face substantial resistance around the 22,350-22,500 zone. Given the pressure across most sectors, traders are advised to adjust their positions accordingly, limiting long positions to sectors such as FMCG and automotive that exhibit strength amidst the downturn.
