Nifty 50 breakdown warning: With Indian markets reeling under pressure amid weak global cues, surging crude oil prices and persistent foreign institutional investor (FII) selling, technical experts are warning that Nifty could slip further if key support levels fail to hold, while volatility indicators continue to signal nervousness across Dalal Street.
In an interaction with ET NOW, market experts have decoded the key technical levels for Nifty and Bank Nifty and also discussed why aggressive buying may not be advisable right now. They also highlighted selective opportunities emerging in sectors like chemicals, power and media.
Opportunity to buy for the rest of the week or hold off?
Indian equities came under pressure on Monday as the Asian market crashed on chip-led selling in South Korea and the US in the previous session.
Both benchmark indices, Sensex and Nifty 50, fell 1.24 per cent and 1.26 per cent, respectively, at intraday to trade lower at 73,318.94 and 23,070, respectively.
Kospi fell 8.8 intraday, triggering a trading halt in the Korean market, and Japan’s Nikkei also fell over 4 per cent. The broader market sentiment was also dampened due to fresh strikes between Israel and Iran, putting the sensitive ceasefire deal at risk between the West Asian nations.
Meanwhile, the Nifty Bank index slipped over 1 per cent at the open to 53,853, while the Nifty Smallcap index also declined around 1 per cent to 17,900. Market breadth remained decisively negative, with just 8 stocks advancing against 42 declines, highlighting the intensity of the selloff.
Why stock market is falling
South Korea’s benchmark KOSPI index tumbled more than 8 per cent on Monday, triggering a market-wide circuit breaker, as a sharp global selloff in semiconductor stocks combined with rising geopolitical tensions to drive investors sharply away from risk assets.
The index dropped as much as 8.8 per cent in early trading, prompting the Korea Exchange to impose a 20 minute halt under a Level 1 circuit breaker, the second such suspension this year before the decline eased slightly, leaving the KOSPI down around 8.4 per cent near the 7,400 mark.
The rout was sparked in part by heavy losses in US chip stocks late last week, after underwhelming forecasts from Broadcom dragged the Philadelphia Semiconductor Index down more than 10 per cent, its steepest fall since March 2020. South Korea’s major chipmakers, including Samsung Electronics and SK Hynix, led the declines, reflecting their significant exposure to global tech demand.
Investor sentiment was further shaken by escalating tensions in the Middle East after reports that Iran had launched missiles at Israel, adding to concerns over global growth, inflation risks, and potential volatility in energy markets. The combined pressure reversed momentum in what had been one of the world’s best-performing equity markets this year, driven largely by the artificial intelligence-led surge in semiconductor shares.
Markets came under pressure following Iran’s reported missile strikes on Israeli-linked targets. Tehran described the attacks as defensive in nature, stating they were aimed at military positions in response to what it called prior violations. Iranian officials also warned that any retaliation would be met with a “strong” response, raising fears of a wider regional conflict.
The U.S. Embassy in Israel issued security alerts, instructing government personnel to shelter in place and prepare for possible relocation. Trump, in his comments, called for restraint on all sides. He urged Iran to return to negotiations and reportedly planned to speak with Israeli Prime Minister Benjamin Netanyahu to discourage further escalation. “You shot your missiles, that’s enough,” he said, emphasising the need to bring both parties back to the negotiating table. He also noted that earlier Israeli actions were not coordinated with the United States, suggesting internal divisions over strategy. Following the escalation, Iran closed parts of its western airspace.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
