Indian markets ended a two-session rally on Friday due to stalled Iran-US negotiations, high energy prices, and a weakening rupee, leading to broad-based selling. The Nifty fell 2.09% to 22,819.60, and the Sensex dropped 2.25% to 73,583.22, marking a monthly decline of over 9% for the Nifty—its sharpest since the COVID-19 crash.
Analyst Sudeep Shah of SBI Securities highlighted a repetitive, dangerous pattern: brief 2-3 day pullbacks that lure traders before sharp gap-down openings, causing significant wealth erosion. He stressed the need for extreme caution and risk management due to fragile sentiment.
Technically, Nifty remains bearish below key moving averages. Critical support lies at 22,650-22,600; a break could lead to 22,400 and 22,200. Resistance is at 23,150-23,200. Bank Nifty severely underperformed, falling over 13% for the month, and is in a strong bearish trend with support at 51,700-51,800. A “sell on rise” strategy is advised for the index.
Amid the downturn, the Nifty CPSE index showed relative resilience, offering a pocket of stability. On volatility, Shah recommended cash markets over leveraged F&O for most, as leverage magnifies losses in sharp, fast moves. For individual stocks, he noted bullish momentum in HEG and Emcure (if key levels hold) and bearish trends in FirstCry, IDBI Bank, and Lodha.
Overall, the outlook remains cautious with downside pressure prevailing until a sustained break above resistance occurs.
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