After a successive stock market crash on all four sessions last week, the Nifty 50 index slipped from the 23,140 to 22,421 level, logging a weekly loss of 719 points or 3.10% weekly loss. Market experts believe persistent foreign selling, a weaker Indian Rupee and rising global bond yields outweighed the support from softer crude prices.
Speaking on the Indian stock market sell-off, Shrikant Chouhan, Head Equity Research at Kotak Securities, said, “The market consistently faced selling pressure at higher levels during the week. On the weekly charts, it formed a long bearish candle. On the intraday charts, it continued to make lower highs and lower lows, indicating a largely negative trend. We believe the market’s short-term texture is weak but oversold. Therefore, the possibility of a pullback rally from current levels cannot be ruled out.”
The Koak Securities expert said the relief rally may push the Nifty 50 index up to 22,500 levels.
RBI MPC meeting in focus
Expecting the relief rally to be a short-lived affair on Dalal Street, Avinash Gorakshkar, Founder of Avinash Mentor Research, said, “The market is estimating at least a 25 BPS rate hike in the RBI MPC meeting outcome next week. However, the Central Bank of India may surprise the market by announcing more hike in the key rates because this is for the first time when there is no commentary from the Government of India (GoI) despite successive selling on Dalal Street.”
Gorakshkar said that if the RBI announces a more than 25 BPS key rate hike, we can expect the Nifty 50 index to break below 22,000 on a closing basis.
Hawkish US Fed to add salt to bulls’ wounds
“The recent stock market crash can be seen as market discounting the 25 BPS rate hike coming in the RBI MPC meeting. However, the market would wait for the outcome of the US Fed meeting expected at the end of October 2026. The market is estimating an additional 25 BPS US Fed rate hike, which will fuel US bond yields and strengthen the US Dollar against major global currencies, an outcome which will put pressure on the global equities, including Dalal Street,” said Mahesh M Ojha, VP — Research and Business Development at KC Securities.
Anuj Gupta, a SEBI-registered market expert, said, “The upcoming week would be important for both bulls and bears. Both are expected to remain vigilant about the Nifty 50 close. If the Nifty 50 finishes above 22,000, then a ray of trend reversal will remain intact, whereas a close below 22,000 next week is expected to receive a big cheer and applause by bears.”
US inflation, payroll data hold key
“The fortnightly US inflation data and US Non-Farm Payroll data will be crucial ahead of the US Fed meeting. A disappointing number in these important US prints would trigger the chances of another 25 BPS US Fed rate cut, a development which would be negative for the global equities, including key benchmark indices of the Indian stock market,” said Anuj Gupta.
Chinese refiners suspend October fuel exports
According to Reuters, Chinese refiners have suspended oil product exports for October, four people briefed on the matter said, as Beijing looks to preserve domestic stocks, a move that will further crimp war-constrained fuel markets.
Beijing restricted fuel exports in March after the outbreak of the US-Iran war disrupted Middle Eastern crude supplies. The world’s top importer relaxed the curbs in July and is managing diesel, gasoline and jet fuel shipments on a monthly basis.
“This is a negative development for the global equities, as it would fuel crude oil prices, which are already at elevated levels,” said Avinash Gorakhkar of Avinash Mentor Research.
Nifty 50 technical outlook
Decoding the technical chart pattern of the Nifty 50 index, Mahesh M Ojha said, “Irrespective of the bull or bear market, the Nifty has a history of trading in a range. Currently, it is trading within a broader 22,000 to 26,000 range, with crucial support at 21,700. Ahead of this, the 50-stock index traded in the 18,000 to 20,000 range for an extended period before the COVID-19 outbreak. Likewise, from 2015 to 2018, the index traded in the 15,000 to 18,000 range. So, a decisive breakdown below 21,700 is expected to fuel the probability of the Nifty 50 index trying to test the 20,000 levels, with the next crucial support shifting from 21,700 to 19,800 to 19,700 range.
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