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Nifty 50 and Sensex fell sharply about 2.6 per cent each last week. However, the Nifty Bank index managed to stay afloat, and range-bound for the second consecutive week. The index was down marginally by 0.12 per cent.
All sectoral indices barring the BSE FMCG (up 0.35 per cent) ended the week in red. The BSE IT index was beaten down the most. The index was down 8.4 per cent.
Knocked down
The US President Donald Trump’s tariff announcement on Wednesday rattled the global equity markets in the second half last week. The Dow Jones Industrial Average in the US has tumbled over 7 per cent.
The other major global indices such as Germany’s DAX and Japan’s Nikkei 225 were down 8 and 9 per cent respectively. China’s Shanghai Composite, however, remained broadly stable and was down marginally by 0.27 per cent.
Panic not
The Indian benchmark indices can continue to remain under pressure on the back of the sell-off in the global markets. However, as seen from the charts, strong supports are there for the benchmark indices which can limit the downside. In worst case scenario, Nifty and Sensex can run into a sideways consolidation for some time rather than witnessing a steep fall from here. So, any fall from current levels should be considered as a good buying opportunity from a long-term perspective.
Sell again
Foreign Portfolio Investors (FPIs) sold Indian equites again last week after buying strongly in the previous week. The equity segment saw a net outflow of $1.21 billion last week. The FPI action in the coming weeks will need a close watch.
Video Credit: Businessline
Nifty 50 (22,904.45)
The fall to 22,900 happened last week in line with our expectation. Nifty touched a low of 22,857.45 and closed the week at 22,904.45, down 2.61 per cent.
Short-term view: The outlook is negative. Resistances are at 23,000-23,100 and then at 23,200. Nifty can fall to 22,700. The price action thereafter will need a close watch.
A bounce from 22,700 can take the Nifty back up to 23,100-23,200. Such a move will be very positive. It will indicate an inverted head and shoulder pattern on the chart. This is bullish.
On the other hand, if Nifty breaks below 22,700, an extended fall to 22,500-22,400 can be seen. Thereafter, it will have to be seen if the Nifty is reversing higher or not.
Chart Source: TradingView
Medium-term view: On the charts, there is no danger of witnessing a steep fall. If Nifty declines below 22,700, there are good chances to see a sideways consolidation for some time, rather than a steep fall. The trading range can be 21,900-23,900.
Nifty will come under pressure for a steeper fall only if it declines below the 21,700-21,650 support zone. Only in that case, there is a danger of the index tumbling to 20,000-19,500. But such a fall looks less likely as of now.
So, broadly we expect the Nifty to sustain above 21,900. We retain our positive bias on the Nifty to breach 23,900 eventually and rise to 25,000-26,000 initially. It will also keep the upside open to see 28,000-28,500 early next year.
As such, any fall to 22,400 or 22,000 should be considered as a good buying opportunity from a long-term perspective.
Nifty Bank (51,502.70)
Nifty Bank index is stuck in a range over the last two weeks; 50,740-52,065 has been the trading range. Within this range, the index has closed the week at 51,502.70, down 0.12 per cent.
Short-term view: The bias remains positive. Support is at 50,650. We expect the index to rise towards 52,700 in the short term. A decisive break above 52,700 will be bullish to see 53,000 and 54,000 on the upside.
If the Nifty Bank index breaks below 50,650 it can fall to 49,900 first. A further break below 49,900, if seen can drag it down to 48,000.
Chart Source: TradingView
Medium-term view: The broader bullish view remains intact. The expected rise to 54,000 mentioned above will keep the doors open for the rally to 58,000-58,500 by the end of this year.
The 48,000-47,700 zone will continue to remain as a crucial support. The bullish view will get negated only if the Nifty Bank index declines below 47,700.
Sensex (75,364.69)
Sensex broke below the support at 76,800 and fell to a low of 75,240.55. It closed the week at 75,364.69, down 2.65 per cent.
Short-term view: Support is at 74,800 which can be tested this week. A bounce from there will give a breather for the Sensex and take it up to 76,500-76,700.
On the other hand, if the Sensex breaks below 74,800, an extended fall to 73,700-73,600 can be seen.
Chart Source: TradingView
Medium-term view: The big picture is positive. The region between 73,000 and 72,500 will continue to act as a strong support. There are chances to see a sideways consolidation between 72,500 and 78,750 for some time. The bias will remain bullish to see 80,000 first and then 90,000 over the long-term.
The level of 71,500 is a crucial support. The bullish view will get negated only if the Sensex declines below this support.
Dow Jones (38,314.86)
The Dow Jones Industrial Average tumbled 7.86 per cent last week. The index has declined well below our expected level of 39,000. It touched a low of 38,264.87 and closed the week at 38,314.86.
Chart Source: TradingView
Outlook: A crucial support is at 37,900 which can be tested this week. The price action around this support will need a close watch. We expect this support to hold on its first test.
A bounce from around 37,900 can trigger a relief rally to 40,000-41,000 in the short term.
But, if the Dow declines below 37,900, an extended fall to 37,000 can happen.
Published on April 5, 2025
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