Market Wrap

Indian equity markets closed the week on a distinctly weak footing, with the Nifty50 sliding 2.50%, marking one of its sharpest weekly declines in the past three months. Persistent selling pressure dragged the index decisively below the 25,700 mark, signalling a clear shift in investor sentiment from “buy-the-dip” to caution and capital protection.

The pain was far deeper in the broader markets. Midcap and smallcap stocks saw aggressive profit booking, reflecting stretched valuations and rising risk aversion. Sector-wise, IT emerged as the lone outperformer, managing to close in positive territory. Defensive positioning, relative earnings visibility, and supportive currency dynamics helped IT stocks outperform in an otherwise risk-heavy environment.

Globally, cues were mixed. U.S. markets ended overnight trade with the Dow Jones in the green, while the Nasdaq slipped, indicating selective selling in growth-oriented names. Importantly, this mixed U.S. close did not significantly dent sentiment elsewhere, as Asian and European markets traded with gains, supported by selective buying and expectations of stable global growth.

On the macro front, elevated global bond yields, cautious commentary from central banks, and lingering geopolitical and trade-related uncertainties continued to weigh on risk appetite. Together, these factors reinforced a risk-off tone across domestic equities.

What's Ahead

Volatility is likely to persist in the near term as investors closely monitor inflation data, global bond yield movements, and signals from major central banks. Markets are expected to turn increasingly stock-specific, with preference for defensive sectors and companies offering earnings visibility.

Any negative global macro surprise or escalation in geopolitical or trade tensions could further pressure sentiment, while stable global cues may help limit downside from current levels.

Market Snapshots

Institiutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The NIFTY 50 extended its corrective phase, closing below the crucial 50-day EMA, confirming deterioration in the short-term trend. The index has now declined for the fifth consecutive session, highlighting persistent selling pressure in heavyweight stocks. Momentum indicators remain weak, with the RSI slipping below 40, signalling strong bearish bias and limited immediate upside potential. As long as the index stays below the 25,860–25,970 resistance zone, rallies are likely to face selling pressure. On the downside, a decisive break below 25,507 could open the door toward 25,397, making these levels critical supports to watch in the near term.

Bank Nifty

NIFTY BANK closed lower after breaching its 20-day EMA, placing the index at a crucial technical juncture. The failure to sustain above short-term averages reflects weakening momentum in banking heavyweights, further confirmed by the RSI slipping below 50. The index is currently trading in a vulnerable zone, where sustained weakness below 59,150 could trigger a deeper correction toward 58,850–58,602. On the upside, any pullback rally may face resistance near 59,650, with a stronger hurdle placed around 59,900, keeping the broader trend cautious.

Nifty Financial Services

The NIFTY Financial Services index underperformed the broader market, closing with over a 1% decline amid broad-based selling across lenders and NBFCs. Weak market breadth and sustained pressure suggest a continuation of the corrective bias. The index is hovering close to key support levels, and a breakdown below 27,207 could accelerate downside toward 27,091. Until the index decisively reclaims the 27,580–27,700 resistance zone, upside attempts are likely to remain limited, with traders expected to adopt a sell-on-rise approach.

Sensex

The BSE SENSEX ended sharply lower, reflecting broad-based distribution across index heavyweights. The index remains under pressure below its immediate resistance zone, indicating lack of follow-through buying at higher levels. Technically, the near-term structure remains weak, and a sustained move below 82,986 could expose the index to a further slide toward 82,624. On the upside, recovery attempts are expected to face stiff resistance near 84,157, with a stronger cap at 84,519, suggesting that volatility may persist until clearer directional cues emerge.