The Indian stock market extended decline on Friday, with the benchmark indices, Sensex and Nifty 50, falling over half a percent each weighed down by selling in auto, metals, banks, IT and energy sectors.
The BSE Sensex dropped 0.78% to 81,539.97, while the NSE Nifty 50 slipped 0.86% to 24,844.45. The Bank Nifty shed 0.62% to 56,710.15. Broader markets also reeled under selling pressure as the Nifty Smallcap 100 and the Nifty Midcap 100 indices were down over 1% each.
Bajaj Finserv, Bajaj Finance, Shriram Finance, Bajaj Auto, Hero MotoCorp, Eternal, PowerGrid Corporation of India and Jio Financial Services were among the top Nifty 50 losers.
“The near-term market construct has turned weak. Sustained FII selling of ₹11572 crores in the last four trading days will weigh on the market. The weakness in the broader market, particularly in smallcaps, might continue since valuations had turned excessive and difficult to justify,” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
Technical View
The decline in heavyweight stocks dragged the Nifty 50 below the psychologically and technically important support level of 24,900. A sustained breakdown below this level could lead to further downside in the near term, analysts said.
“Nifty 50 was consolidating within its 50-DMA support zone of 24,900–25,000. However, the index has now breached this critical support and may see further correction. Market breadth remains negative, and broader indices are undergoing price-wise correction,” said Ruchit Jain, Vice President – Equity Technical Research, Motilal Oswal Financial Services.
According to Jain, a close below 24,900 could open up further downside of 350–400 points, maintaining a negative bias for the index.
Anshul Jain, Head of Research at Lakshmishree Investments, echoed a cautious outlook, stating that the Nifty 50 could move towards its swing low of 24,733 following the breakdown below 24,900.
However, some analysts believe the downside momentum may slow down around the current levels.
“The slippage past 24,900 could set an immediate objective of 24,750 – 24,650. Further supports are near 24,450 and 24,000. However, with momentum low, favoured view expects downsides to slow down near 24,900 initially, prompting sideways moves again, with upsides capped near 25,130,” said Anand James, Chief Market Strategist, Geojit Investments.
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