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Sensex Analysis: Key Levels to Watch as Global Risks Persist
Indian equity markets started the week on a cautious note, reflecting a blend of global headwinds and domestic sectoral rotations. Despite profit booking and mixed cues from global markets, the Sensex managed to defend key support levels, hinting at resilience amid ongoing macroeconomic challenges. This measured performance comes as U.S. government shutdown fears and U.S.-China trade tensions continue to inject risk aversion across Asia.
Mixed Sentiment but Support Holds
The broader Indian market benchmark, the Sensex, closed above its immediate support at 81,700, showcasing defensive strength in the face of external uncertainties. Market participants saw profit booking in consumption and discretionary sectors following recent rallies, while financial stocks attracted selective buying after regulatory easing. Mid- and small-cap segments maintained a relatively positive tone, offsetting some of the downside pressure.
On-chain metrics and derivatives data further underscore a market in flux. Bitcoin’s dominance stands steady at around 47%, while total crypto market capitalization hovered near $1.2 trillion, reflecting consolidation after recent volatility. Crypto liquidations, a barometer of market stress, dipped by 15% over the past 24 hours, suggesting reduced panic selling amid mixed sentiment.
Sector Rotation Mirrors Crypto’s Altcoin Flux
Much like the rotation seen in crypto’s altcoin markets, Indian equities are witnessing a shift in investor focus. IT stocks underperformed on mixed Q2 earnings, whereas financials and select mid-caps gained traction, reflecting a tactical rebalancing by investors. This sector rotation parallels movements in the crypto space where traders are shifting capital from large-cap tokens like Bitcoin to altcoins showing short-term promise.
Amol Athawale, VP of Technical Research at Kotak Securities, remarks, “The market is balancing between global uncertainties and domestic support factors. As long as Sensex trades above 81,700, the bullish trend remains intact. Investors should watch for sustainable moves beyond 83,100, which could confirm a further upswing.”
Technical Analysis: Gauging the Market’s Next Moves
Technical indicators paint a cautiously optimistic picture for the Sensex. The index has formed a strong bullish candle on the weekly chart and continues to trade above its 20-day Simple Moving Average (SMA), a key short-term support marker. The Relative Strength Index (RSI) currently hovers around 58, indicating neither overbought nor oversold conditions and allowing room for upside momentum.
The Moving Average Convergence Divergence (MACD) shows signs of a bullish crossover, with the MACD line edging above the signal line, reinforcing positive momentum. The Directional Movement Index (DMI) reveals the +DI line comfortably above the -DI, signaling that buyers still hold the upper hand, though the Average Directional Index (ADX) suggests moderate trend strength.
Resistance is expected near the 83,100 level, with immediate support between 81,700 and 81,500 acting as a critical zone. A decisive breach below this support could expose the market to short-term corrections.
As markets digest ongoing geopolitical tensions and macroeconomic data, investors should closely monitor Sensex’s ability to sustain gains above 83,000. A break above this zone could pave the way for further advances towards 83,700 and beyond. Conversely, renewed risk aversion triggered by global developments may test the lower support bands.
In crypto markets, reduced liquidation pressures and steady BTC dominance hint at a phase of consolidation, with traders likely awaiting clearer directional signals. The Indian market’s cautious optimism aligns with a broader risk-off tone, balancing potential upside against external uncertainties.
With multiple moving parts—from global trade to domestic earnings and on-chain crypto activity—market participants are advised to adopt a measured approach, keeping technical levels and sector rotations in focus.
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