- Nifty 50 fell below key support at 23,900 amid a third consecutive session loss
- Bearish weekly chart signals profit booking and continued Nifty weakness ahead
- Rising crude prices and US-Iran ceasefire uncertainty weigh on market sentiment
The Indian equity benchmarks suffered a crash in Friday's session, with the NSE Nifty 50 slipping below its crucial support zone of 23,900. Going ahead, analysts expect Nifty's weakness to continue.
"Index on weekly chart formed a bearish candlestick pattern, signalling profit booking at higher levels," said Bajaj Broking Research.
According to Ajit Mishra, SVP, Research at Religare Broking, recent spike in crude oil prices along with looming uncertainty over US–Iran truce talks continue to weigh on market sentiment.
"Additionally, a disappointing earnings outlook from IT major Infosys triggered a sharp sell-off in the IT pack, further dragging the indices lower," Mishra outlined.
Therefore, crucial support for the index is now placed at 23,500 level. On the flipside, in case of a rebound 24,200–24,500 zone is likely to act as a strong resistance.
"Any recovery towards this zone may face selling pressure unless supported by easing crude prices and improved global cues," Mishra explained.
He advised traders to adopt a selective approach, focus on stock-specific opportunities, and keep position sizes in check.
Nifty Bank
The Bank Nifty index will most likely mirror Nifty's weakness as long as it trades below the 56,800 level, as per Amol Athawale, VP Technical Research at Kotak Securities.
"For Bank Nifty, as long as it is trading below the 50-day SMA or 56,800, a weak formation is likely to continue," Athawale stated.
On the downside, it could retest levels of 55,000–54,750. Conversely, above the 50-day SMA of 56,800, the next resistance for Bank Nifty would be in the 57,500–58,000 range, he added.
Market Recap
India's benchmark equity indices ended lower for the third consecutive session on Friday, pulled down by information technology and pharma stocks. The indices reported their first weekly loss after two as uncertainty over the US-Iran ceasefire and poor IT earnings and guidance weighed on sentiment.
The Nifty 50 index eventually closed at 23,898, down 1.14%. Notably, this marked the first instance in April where Nifty has declined by more than 1% in a single session. The BSE Sensex shed nearly 1,000 points or 1.3% to close at 76,664.21.
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