The Indian stock market came under severe selling pressure in Monday’s trade, September 28, with key indices breaking key psychological support levels, as surging crude oil prices, coupled with elevated bond yields and fears of global monetary tightening, continued to weigh on market sentiment.
Domestic factors, too, remained unfavourable for the bulls, as the drought declaration in Maharashtra hit related stocks such as sugar and others heavily in trade, keeping the overall sentiment pessimistic.
The markets opened the session on a lower note, and the wave of selling persisted through the close, dragging domestic equities to a nearly six-month low.
Indian stock market today
The Nifty 50 dropped another 1.54% in trade to settle at 22,762. The index broke below the 23,000 level for the first time since April, and its year-to-date losses expanded to 13%. The Sensex closed 1.43% lower, breaking below the 73,000 level to close at 72,836.
The broader markets, too, felt the pain, with the Nifty Midcap 100 plunging 1.7% and the Nifty Smallcap 100 index crashing 1.82%. All sectoral indices closed in the red, with PSU banks bearing the brunt of the sell-off as they sank 3.20%. Realty, oil and gas, metals, auto, chemicals, FMCG and pharma all closed with losses of over 1%.
Crude oil prices recovered much of their recent losses after US President Donald Trump rejected Iran’s latest proposal to reopen the Strait of Hormuz, reducing the likelihood of a near-term diplomatic resolution and increasing the risk of prolonged supply-side disruptions and higher commodity prices.
Iran stuck to its proposal to reopen the crucial Strait of Hormuz within seven days, saying it would not soften its conditions. Trump said he expects negotiations to resume this week despite rejecting Tehran’s latest offer, Axios reported. He also said he was thinking “very seriously” about a ban on diesel exports.
Several Federal Reserve officials have pointed to resilient economic growth and a strong labour market as reasons why further tightening may be needed. Cleveland Fed President Beth Hammack said those factors, along with concerns about government debt, are helping drive long-term Treasury yields higher.
However, Beth M. Hammack has also said the recent rise in yields reflects higher real rates, a solid economic outlook, strong tech-sector investment and adjustments to the monetary-policy outlook, rather than a loss of confidence in inflation.
Asian markets under pressure: Can key support levels prevent further losses?
Among other major Asian markets, Japan’s benchmark Nikkei 225 declined 0.7% to finish at 65,877.62. South Korea’s Kospi dipped 2.7% to 6,889.74. Hong Kong’s Hang Seng rose 0.5%, while the Shanghai Composite lost 1.7%.
Vipin Kumar, AVP-Research at Globe Capital Market, said the Nikkei index retraced after facing resistance around the 67,000-spot level. Going ahead, we maintain our sideways view on the Nikkei index as long as it trades below 67,000 spot levels. The immediate price support is placed around 65,000.
On the Kospi index, Vipin Kumar said, “In line with the Nikkei, the Kospi index is also trading in a congestion zone and declined after facing resistance around the upper band of its consolidation range at 7,220. The immediate downside supports are placed around the 6,600 spot levels.”
For the Dow Jones, Kumar said the Dow Jones bounced back again on Friday from the support level of 51,100. The short-term chart structure points towards a short-term consolidation in the 51,000–52,300 range before taking a directional move. A decisive close on either side of this range will trigger the next short-term move in that direction.
Nifty outlook: Can bulls defend 22,500–22,400 amid selling pressure?
Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, stated that the Nifty’s decisive break below 23,000 opens the possibility of a move towards 22,600–22,580, where the 200-week SMA is positioned, and a failure to hold this zone could expose 22,400.
A mean-reversion bounce may emerge near the 200-week average, but 23,000–23,100 will now act as the first recovery hurdle. The broader structure remains sell-on-rise unless the Nifty reclaims 23,500, while Bank Nifty must recover above 55,175 to restore the possibility of sustained support from financials, Hariselvan added.
Vipin Kumar said the Nifty index breached the 23,000-spot level on the downside, triggering selling pressure in domestic markets. He projects that the next support for the Nifty index lies around the 22,500–22,400 spot levels. Therefore, he suggests traders maintain a sell-on-rise strategy on the Nifty index as long as it remains below the 23,300-spot level on a closing basis.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
