Nifty started Tuesday’s session with another gap-down opening, with sellers pushing the index sharply lower in the first hour of trade. However, a recovery from the day’s low helped the benchmark recoup a significant portion of its early losses.
Amid expiry-related volatility, Nifty eventually settled at 22,716, down 0.28% for the session.
The decline also dragged Nifty to its 200-week moving average, currently placed at around 22,600. This is the first time since the Covid-19 market crash that the index has fallen to this long-term technical support level.
Among Nifty constituents, Adani Enterprises and Adani Ports were the top performers, while Titan and Wipro were the biggest laggards.
At the sectoral level, sentiment remained weak, with Nifty IT, Realty and FMCG extending their declines. Metal and Pharma stocks, however, saw some buying interest.
The broader market also remained under pressure, with the Nifty Midcap 100 declining 0.99% and the Nifty Smallcap 100 falling 0.81%.
Indian equities are expected to remain in a consolidation phase after the market slid to a six-month low, marking a 6.8% decline and its eighth consecutive weekly fall — the longest losing streak since 2020.
Domestic economic activity, however, remains a relative bright spot amid the broader global weakness. August industrial production growth accelerated to 8.0% year-on-year, its fastest pace in two months, while improving consumer durables demand points to a recovery in urban discretionary spending.
Resilient GDP growth is another supportive factor. After the recent correction, valuations have become more reasonable, which could limit the downside from current levels.
Global cues will remain in focus, with US consumer confidence and JOLTS job openings data due later today. Markets will also track China’s manufacturing PMI, US and UK second-quarter GDP data, US crude inventories and comments from Federal Reserve Governor Christopher Waller.
Crude oil prices, the rupee, global bond yields and the US response to developments around the Strait of Hormuz will remain key monitorables.
Nagaraj Shetti of HDFC Securities said the underlying trend for Nifty remains weak. He expects any bounce towards the 22,900–23,000 zone to be short-lived and sees such moves as potential sell-on-rise opportunities.
Shetti that a break below 22,550, he said, could open the way for further declines towards 22,200 in the near term.
Sudeep Shah of SBI Securities said the 22,570–22,550 zone, corresponding to Tuesday’s low, could act as immediate support. A decisive break below this zone could trigger fresh selling pressure towards 22,400. On the upside, the 22,900–22,930 zone is likely to act as an immediate hurdle.
According to Shah, a sustained move above this range could extend the pullback towards 23,050. However, the broader structure remains weak until the index sees sustained buying traction.
Rupak De of LKP Securities said a decisive break below 22,600 could trigger a sharper correction. However, if Nifty manages to hold above 22,600, a recovery towards higher levels could be possible. He said 22,600 will therefore remain a crucial support level, while 22,800 is the immediate resistance on the upside.