Indian equity markets witnessed a volatile session on Monday, with the Nifty erasing early gains to close lower, reflecting increased profit booking and weak global cues. The benchmark Nifty 50 ended at 22,460.30, down 92 points or 0.41%, while the Sensex slipped 217 points to settle at 74,115. Broader market indices faced sharper cuts, with the Nifty Midcap 100 and Nifty Smallcap 100 dropping 1.53% and 1.97%, respectively.
The last-hour sell-off was triggered by a steep decline in US stock futures and concerns over global trade tensions, leading to cautious sentiment among investors. Sectorally, only FMCG stocks managed to stay in the green, while Realty, PSU Bank, Energy, and Auto stocks witnessed a decline of 1-2%. With key economic data such as US and India CPI and India’s IIP set for release this week, traders are expected to remain on edge.
Nifty outlook: 22,200 remains a key support level for further upside
The Nifty, which had gained nearly 700 points in the last 4-5 sessions, finally saw a pause in its upward momentum, forming a shooting star-like candle on the daily chart. This pattern indicates profit booking near the 20-day EMA level. According to Bajaj Broking Research, the index now holds a crucial support level at 22,200, which coincides with the 61.8% retracement of its recent pullback (21,964-22,676). Holding above this level will be essential for the continuation of the uptrend, potentially leading to a rally towards 22,800-23,000 in the coming sessions.
Bank Nifty outlook: 48,000-47,800 crucial for pullback
The Bank Nifty extended its decline for the second consecutive session, closing 281 points lower at 48,217. A bearish candle with a long upper shadow signaled ongoing weakness in the banking index. On the weekly chart, Bank Nifty has been forming lower highs and lower lows over the past four weeks, indicating a continued corrective phase. A reversal of this pattern is necessary to confirm a trend shift.
Currently, the index is testing the lower band of its recent consolidation range of 47,800-49,000. Analysts at Bajaj Broking Research believe that holding above the 48,000-47,800 zone is crucial for any meaningful rebound towards the 49,000 mark. Failure to maintain this support could lead to further downside pressure.
Market sentiment remains cautious
With heightened volatility and global uncertainties weighing on sentiment, the next few sessions will be critical in determining market direction. If the Nifty manages to sustain above 22,200, it could resume its upward momentum, while any breach of this level may invite further selling pressure. Similarly, the Bank Nifty must hold key support zones to regain strength. Investors are advised to closely track global cues and upcoming macroeconomic data for further clarity on market trends.
