Indian Stock Market Faces Downward Pressure Amid Global Challenges

The Indian stock market indices, Sensex and Nifty 50, are expected to open lower on Tuesday, following a downturn in global markets. The Gift Nifty has mirrored this trend, trading around the 24,885 level, nearly 100 points below the Nifty futures’ previous close.

On Monday, the domestic equity benchmark indices extended their losing streak to six consecutive sessions. The Sensex plunged 638.45 points, or 0.78%, closing at 81,050.00, while the Nifty 50 decreased by 218.85 points, or 0.87%, finishing at 24,795.75. These movements have resulted in the formation of a long bearish candle on the daily chart, suggesting a continuation of the steep downward momentum.

Nagaraj Shetti, a Senior Technical Research Analyst at HDFC Securities, commented on the market trends, stating, “The positive chart pattern with higher tops and bottoms on the daily chart seems to have been negated by the Nifty 50 moving below the last higher bottom of 24,753 levels on Monday. Hence, this market action indicates that any upward bounces from current or lower levels may be short-lived, potentially forming a new lower top.”

Aditya Agarwal, Head of Derivatives & Technical Analysis at Sanctum Wealth, echoed this sentiment, suggesting that while short-term support could push Nifty 50 towards 25,200 or 25,350 levels, the overall sentiment remains bearish. “A close below 24,700 could further deteriorate market sentiments, potentially driving the index towards 24,450 or 24,249 levels,” Agarwal stated.

Further analysis by VLA Ambala, Co-Founder of Stock Market Today, recommends a ‘sell on rise’ strategy due to increased volatility. “The volatility index surged 70% this week, signaling caution, especially for less experienced investors. Hedging portfolios might be prudent under these conditions,” Ambala advised.

On the broader spectrum, geopolitical tensions, particularly concerning potential Israeli retaliatory actions against Iran, along with rising Brent crude oil prices, exacerbate the market’s challenges. The Brent crude oil is nearing the $80 per barrel mark, posing economic concerns for India, a major oil importer.

The exit poll results indicating losses for the ruling BJP in Haryana and Jammu & Kashmir, combined with anticipated weaker corporate earnings in the forthcoming quarter, add to the market’s pressure. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that the Indian markets are experiencing Foreign Portfolio Investment (FPI) outflows as investors are drawn to the recent outperformance of Chinese stocks. The anticipated end of China’s National Day holidays may result in increased market activity.

Amidst these fluctuations, the Bank Nifty index also experienced significant losses, dropping 983.15 points, or 1.91%, closing at 50,478.90 on Monday. Analysts, such as Aditya Agarwal, suggest immediate support for the Bank Nifty could be seen around 50,100 or 49,750 levels, but resistance is expected at 51,260 or 51,840 levels.