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The Indian stock market experienced its longest weekly losing streak since August 2023, with the NSE Nifty 50 declining 2.7% and the BSE Sensex falling 2.2% for the week. This downward trend was driven by a broad-based selloff fueled by persistent foreign investor outflows and disappointing corporate earnings. All sectoral indices registered weekly losses, with small-caps and mid-caps experiencing the most significant drops at 6.5% and 5.8%, respectively.
Analysts have cautioned about the weak market sentiment and potential for continued selling pressure. Rupak De of LKP Securities highlighted the Nifty's fall below recent consolidation levels, attracting selling pressure and leading to a decisive break below the 24,350 mark. De suggests that any rise toward 24,300-24,400 may be used to reduce long positions, with near-term support at 24,000. Breaking below this level could trigger a downtrend.
Jatin Gedia of Sharekhan echoed the sentiment, noting that the Nifty, after a one-day pause, resumed its decline, reaching the psychological support level of 24,000-24,050. This level coincides with the daily lower Bollinger band, potentially limiting sharp declines. While the trend remains negative, Gedia suggests a possible pullback toward 24,350, which should be viewed as a selling opportunity. From a short-term perspective, 24,000 is considered a significant support level.
Looking at global market indicators, Wall Street closed mixed after a cautious session ahead of the US presidential election. Investors are also awaiting major economic data next week and earnings reports from tech giants like Apple and Meta. The Dow Jones Industrial Average ended down 0.6%, the S&P 500 lost less than 0.1%, while the Nasdaq Composite gained 0.6%.
Europe's main stock index ended Friday's choppy session flat, registering weekly losses due to weak corporate earnings from auto-related companies such as Mercedes-Benz and Valeo. The pan-European STOXX 600 closed flat for the second consecutive day and logged its first weekly loss in three, with real estate stocks among the worst-hit sectors. Auto stocks remained muted, with Germany's Mercedes-Benz dropping 1% after its third-quarter earnings missed estimates.
Technical analysis of the Nifty indicates a long bearish candle formation on the weekly chart, signaling continued pressure in the near term. However, there is potential for a minor pullback or sideways consolidation in the next one to two days following Friday's sharp fall. Open interest (OI) data reveals the highest OI on the call side was at the 24,400 and 24,300 strike prices, while on the put side, it was at 24,200, followed by 24,100.
Momentum indicator MACD displayed bullish signals for several stocks, including Axis Bank, IDBI Bank, Aster DM Healthcare, Coforge, Shree Cements, and CSB Bank. The MACD indicates potential upward movement when it crosses above the signal line. Conversely, the MACD showed bearish signs for Birlasoft, Sun Pharma Advanced Research, and MCX, suggesting a potential downward trend.
IndusInd Bank (Rs 6,101 crore), Dixon Technologies (Rs 5,795 crore), RIL (Rs 2,473 crore), HDFC Bank (Rs 2,274 crore), ICICI Bank (Rs 1,693 crore), Zomato (Rs 1,678 crore), and Axis Bank (Rs 1,513 crore) were among the most active stocks on the NSE in terms of value, highlighting trading turnover. In terms of volume, YES Bank (9.7 crore shares), Zomato (6.6 crore shares), IDFC First Bank (6.4 crore shares), JP Power (5.9 crore shares), IndusInd Bank (5.6 crore shares), Suzlon Energy (4.9 crore shares), and BEL (4 crore shares) were the most traded stocks.
Source: Ahead of Market: 10 things that will decide D-Street action on Monday