It was another weak week for the Nifty, with the index extending its losing streak to a fifth consecutive week as persistent selling pressure kept the benchmark under pressure. The week started on a subdued note, but selling intensified through the first three sessions.
Some buying interest emerged on the penultimate trading day, limiting the downside, while a sharp intraday recovery on Friday helped the index recover most of the losses following a significant gap-down opening. The Nifty 50 ended Friday 0.3% lower at 23,389 after falling as much as 1% to an intraday low of 23,231.
Value buying helped the index pare losses during the session. The benchmark declined 2.1% for the week. The Nifty Midcap 100 and Nifty Smallcap 100 also ended lower, falling 0.3% and 0.6%, respectively. Among sectors, private banks were the relative outperformers, with the index gaining 0.5%.
Realty stocks remained under pressure, with the Nifty Realty index falling sharply to a more than two-month low. Godrej Properties and Lodha were among the key drags as the broader risk-off mood and rising bond yields weighed on the sector. Banking operations were also impacted by a nationwide strike called by bank unions, with employees demanding a five-day workweek and changes to the production-linked incentive scheme.
Further strikes are scheduled later this month and from October 26. In the primary market, the National Stock Exchange announced a price band of ₹1,700-1,785 per share for its IPO, with the issue set to open for subscription on September 17. The IPO is expected to raise around ₹22,662 crore.
What to watch next weekThe near-term outlook for Indian equities remains cautious as elevated crude prices add to inflation and valuation concerns. Brent crude has moved above $100 a barrel and surged towards $110 amid escalating tensions in West Asia, raising concerns over potential disruptions to global supplies.
The rise in crude prices has also pushed global bond yields higher, with the US 10-year Treasury yield approaching 5%. Higher yields could put further pressure on equity valuations and strengthen expectations of a more hawkish stance from the US Federal Reserve.
The rupee weakened to around ₹95.6 against the US dollar, while continued foreign institutional investor selling added to the pressure on domestic equities. Investors will track India’s August CPI and WPI inflation data, the US Federal Reserve’s policy decision, retail sales and industrial production data in the week ahead.
Movements in crude oil, the rupee and global bond yields will remain key market monitorables. On the technical front, Nagaraj Shetti of HDFC Securities said the bearish pattern of lower highs and lower lows remains intact on the daily chart, with the Nifty appearing to be in the process of forming a fresh lower bottom.
He sees the 23,600 level as a key hurdle for any recovery next week, while further weakness could find support around 23,250. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, said the 23,250-23,230 zone could act as an important support area, coinciding with Friday’s low.
A sustained break below 23,230 could intensify selling pressure towards 23,080. On the upside, 23,600-23,620 is likely to act as the immediate hurdle, with a sustained move above 23,620 potentially opening the way towards 23,800. Hitesh Rathi of Angel One said the 23,450-23,500 band is likely to be the immediate hurdle, followed by a stronger resistance zone at 23,600-23,650, which had earlier acted as support.
On the downside, 23,200 is expected to provide immediate support, followed by the 23,100-23,000 zone. The latter is significant as a previous swing low as well as a key psychological support level, he said. The market will remain closed on September 14 on account of Ganesh Chaturthi.