ETMarkets.com Niftys slide continues amid global worries; key levels to watch for a turnaround.
Synopsis
Indian equity markets closed lower for the sixth straight week amid global uncertainties, foreign fund outflows, and weak Q1 earnings. The Nifty slipped below 24,400, signaling cautious investor sentiment. Analyst Rahul Ghose warns of further downside risks with a key support at 23,900, while a rebound depends on reclaiming 24,850. Defensive sectors like FMCG and energy remain preferred.
Indian equity indices closed the week on a negative note, weighed down by a mix of global uncertainties and ongoing foreign fund outflows. The Nifty 50 fell below the critical 24,400 level, ending at 24,363.30, a decline of 232.85 points or 0.95%, while the Sensex dropped 765.47 points or 0.95%, closing at 79,857.79. Investor sentiment remained under pressure throughout the week due to concerns over high global interest rates, weak cues from international markets, and persistent profit-taking in key sectors.Tired of too many ads? Remove Ads
While the overall market trend remains cautiously bearish, oversold signals from technical indicators and the indexs proximity to critical support levels suggest that a potential rebound could be near.Analyst Rahul Ghose, Founder and CEO of Octanom Tech and Hedged.in, interacted with ET Markets regarding the outlook on Nifty and Bank Nifty, along with an index strategy for the upcoming week. The following are edited excerpts from his chat:Its been another rough week for Indian equities. On August 8th, both the Sensex and Nifty slid nearly 1%, with the Nifty closing below 24,400, its weakest level since May. This marks the sixth consecutive week of losses, the longest losing streak in five years. The mood is cautious, with global worries, US tariff news, steady foreign outflows, and some uninspiring Q1 results keeping buyers on the sidelines. Volatility is picking up, and the market feels very headline-driven right now.Closing below the psychological 24,500 mark is a warning sign for the bulls. If the Nifty cant reclaim this level soon, the next zone to watch is 23,900 and below. We might see short-covering rallies along the way, but the bigger trend will only turn positive if we get a close above 24,850. For now, traders should be disciplined and avoid going in too heavy. The election results-related news snapped the entire rally that occurred on Thursday. If Nifty manages to close above 24,850, you could see another 600 points on the upside; otherwise, we are headed to the 23,90024,000 levels.
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This August hasnt been kind so far. FIIs have been net sellers every single day, and the index has been drifting lower. Historically, August can be a mixed month some years see gains, others see choppy sideways trade but 2025 has started with a distinctly negative bias. A combination of global uncertainty and local pressures has made it one of the weakest starts to August in several years.
Yes, they already have. President Trumps move to double tariffs on some Indian exports has rattled confidence, especially in export-oriented sectors like textiles, gems, jewellery, and chemicals. While IT services are less directly impacted, the broader effect is psychological -- global investors dont like trade tensions, adding one more reason to sell risk assets.Bank Nifty closed at 55,521 after recovering from intraday lows, but the tone remains weak. Support sits at 55,125 and then 54,729, if those levels give way, a deeper slide cant be ruled out. On the upside, it needs to get past 56,011 to give the bulls some breathing space. For now, expect choppiness rather than a clear trend.Not immediately. Foreign investors have already pulled out nearly Rs 16,000 crore in August, largely due to risk-off sentiment and concerns over the US-India trade dynamic. The good news is that domestic institutions are stepping in to buy, helping cushion the fall, but FIIs turning buyers again will probably need calmer global conditions.Earnings have been a mixed bag. Some names like MapmyIndia and Kalpataru Projects have delivered strong numbers, but others such as Biocon and Godrej Consumer have disappointed. So far, theres no broad-based earnings-led rally in sight, though positive surprises from heavyweight companies later in the season could help shift sentiment.SBI impressed with a 12% year-on-year profit jump to Rs 19,160 crore, helped by healthy loan and deposit growth. That said, higher funding costs are pressuring margins, and provisions remain elevated. The stock is holding above its long-term average and is trading between Rs 785 and Rs 835 its solid fundamentally, but the sectors broader headwinds still matter.
The IT pack continues to feel the heat -- not so much from tariffs but from the global tech slowdown and FII selling. While a few individual stocks have held up, the index as a whole looks vulnerable and may need better global cues to turn around.Defensive pockets, especially FMCG and select energy names, have been the relative safe zones lately, falling less than the broader market. Staples, quality large-cap financials, and certain energy plays could continue to provide stability, at least until market sentiment improves.
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In tricky markets, its wise to stick with quality, liquid names that can hold their ground. Large-cap defensives like HDFC Life, NTPC, and Titan fit this bill, as do FMCG majors like Hindustan Unilever and select PSU energy companies such as Indian Oil. They may not shoot up overnight, but they can help cushion portfolios against bigger falls.(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
