The Indian benchmark indices sharply recovered most of their losses to close with slight cuts in as oil prices and bond yields cooled off following a report on efforts to reach a temporary Iran-US deal. Sensex, which had dropped around 740 points in the morning, recovered 622 points to close at 74,782.
Nifty 50, which had fallen below 23,250, rebounded 167 points to end the session near 23,400. Despite the sharp recovery, the Indian stock market overall closed in the red, with Sensex down 121 points and Nifty down 80 points.
Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ETMarkets regarding the outlook for the Nifty, options data as well as an index strategy for the upcoming week. ) Nifty down 2% this week, how are charts looking and what strategy should traders adopt?
For the fifth consecutive week, the benchmark index Nifty ended in negative territory, reflecting the persistent weakness in market sentiment. The index declined nearly 2% during the week and formed a sizeable bearish candle with a lower shadow, indicating that despite some buying interest at lower levels, selling pressure continues to dominate the broader trend.
However, domestic equities did not weaken in isolation, with overseas developments further exacerbating market pressure. Those global developments were dominated by the escalation in geopolitical tensions between US and Iran.
97%, its highest level since October 2023. The combination of rising crude prices, elevated bond yields and geopolitical uncertainty significantly dented investor sentiment.
And as these concerns intensified, the selling pressure on Nifty gradually transformed from a controlled decline into a much sharper correction. That sharper correction becomes evident when we look at the index's journey since its recent peak.
After marking a high of 24,774 in the first week of August, Nifty gradually moved lower, with the pace of the decline accelerating significantly during the previous week. From its recent high, the index has tumbled more than 1,500 points, or over 6%, in just 29 trading sessions.
The magnitude and speed of this fall have now started leaving a much clearer imprint on the index's technical structure. That deterioration is visible across multiple technical parameters.
Nifty has slipped below its crucial short and long-term moving averages, reinforcing the bearish undertone. Momentum indicators and oscillators are also portraying a weak picture.
