- Nifty dropped 360 points and Sensex fell 1,124 points amid sharp selling pressure
- Nifty's key support is at 22,700, with resistance between 22,900-23,000 for recovery
- US bond yields above 5% and overseas outflows add to cautious market sentiment
Indian benchmark indices witnessed sharp selling pressure on Monday, with the Nifty ending 360 points lower and the Sensex declining 1,124 points. The steep correction has weakened the near-term technical setup, with analysts highlighting 22,700 as a crucial support level for the Nifty.
According to Ponmudi R, CEO of Enrich Money, the index faces immediate resistance in the 22,900-23,000 zone, with 23,000 emerging as a crucial level for any meaningful recovery. “Only a sustained move above 23,000 could help stabilise the technical structure and prevent further deterioration,” Ponmudi said.
On the downside, 22,700 remains an important support level. A sustained break below this mark could intensify selling pressure and push the index towards the next key support at 22,500.
The sharp fall comes against a backdrop of continued pressure from global markets, particularly elevated US bond yields and persistent overseas fund outflows. “With US bond yields already scaling above 5% and markets seeing little respite from overseas fund outflows, the undertone is likely to remain cautious with a negative bias in the near to medium term,” said Ankur Punj, Managing Director, Equirus Wealth.
Bank Nifty Outlook
The banking index faced even stronger selling pressure on Monday, underperforming the frontline indices by declining nearly 2% and forming a sizeable bearish candle on the daily chart. Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, said Bank Nifty also breached its crucial 55,000 support level, indicating an acceleration in selling pressure and weakening market structure.
“Technically, the index continues to trade below its key short and long-term moving averages, reflecting a firmly bearish trend,” Shah said.
Momentum indicators have also weakened, with the daily Relative Strength Index (RSI) slipping to 30.22, its lowest reading since April 2026. The reading indicates strong downside momentum in the index.
According to Shah, the 55,000-55,100 zone is now likely to act as an immediate resistance area. In this scenario, Bank Nifty could move towards 53,900, followed by the 53,400 level in the short term.
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