Dalal Street heads into the new trading week on a cautious note after the BSE Sensex tumbled 2,092 points over five consecutive sessions, marking its steepest weekly decline in months.
The selloff dragged the Nifty 50 to 23,767, its lowest closing level since June 12, as rising crude oil prices, disappointing earnings from heavyweight lenders and global uncertainty dented investor sentiment.
According to market experts, the coming week will largely hinge on whether the Nifty is able to defend the crucial 23,600 support level.
Rupak De, Senior Technical Analyst at LKP Securities, told ETMarkets that a decisive breach below 23,600 could trigger a sharper correction as selling pressure intensifies. On the upside, he expects 24,000-24,200 to act as the immediate resistance zone, making any recovery difficult unless the index reclaims those levels.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities reportedly said Friday's recovery from intraday lows indicates some buying interest has emerged near support.
However, he believes the short-term trend remains weak, although the broader medium- to long-term structure is still positive.
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Apart from technical levels, investors will closely monitor global developments.
Brent crude has climbed above $100 per barrel amid escalating tensions in the Middle East, raising concerns over inflation, India's import bill and corporate profitability. Higher oil prices remain a key risk for an economy that imports the bulk of its crude requirements.
Corporate earnings will also remain in focus as more companies report June-quarter results.
Analysts reportedly say earnings commentary could determine sector-specific moves, especially in banking, IT and consumption stocks, after mixed results from several index heavyweights last week.
Foreign institutional investor (FII) flows, movement in the rupee and cues from global central banks, including the US Federal Reserve, Bank of Japan and Bank of England meetings, are expected to shape market sentiment.
With global volatility elevated and domestic indices sitting near key support, analysts expect another volatile week, with stock-specific action likely to dominate trading.
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