Nifty’s Breakdown: Will India’s Stock Market Face More Losses?
Nifty’s Bearish Trend – The Indian stock market experienced a significant crash on Friday, April 4, as global recession concerns and the rising fear of a trade war led to broad-based selling. The Sensex index dropped by 930.67 points, or 1.22%, closing at 75,364.69. Similarly, the Nifty index fell by 345.65 points, or 1.49%, ending at 22,904.45. These sharp declines reflect growing anxieties in the market, fueled by recent political and economic developments.
Stocks Hit Hard: Tata Steel, Hindalco, and Others Suffer Major Losses
Among the most notable losers in the Nifty 50, Tata Steel experienced a dramatic decline of more than 8%. Other major companies such as Hindalco, ONGC, Tata Motors, Cipla, L&T, Adani Ports, and Sun Pharma also faced significant losses. Experts attributed the downturn to fears surrounding global trade tensions and the potential for a global recession.
According to Vaibhav Vidwani, a research analyst at Bonanza, the market sell-off was primarily driven by concerns over the potential impact of a global trade war. “Looking ahead, market expectations are cautious due to ongoing global uncertainties and potential retaliatory measures from trading partners,” Vidwani stated.
Technical Analysis Suggests Bearish Sentiment for Nifty
In terms of technical analysis, Rupak De, a senior technical analyst at LKP Securities, highlighted a breakdown in the Nifty daily chart, indicating a bearish outlook. The Nifty index has broken down from a consolidation phase, and despite finding crucial support at 22,900, there is growing concern over potential further losses.
“If Nifty falls below 22,900, it could trigger more market corrections. If it breaks this level, the index could move toward 22,676. However, on the upside, resistance is seen at 23,100, and a move above this level could signal a strong uptrend,” said Rupak De.
Key Support and Resistance Levels for Nifty: A Bearish Trend in Focus
Nagaraj Shetti, a senior technical research analyst at HDFC Securities, pointed out that a long bear candle had formed on the Nifty daily chart, signaling a decisive downside breakout. Shetti explained that the chart pattern suggested a double top around the 23,800 level, which could lead to further declines.
“Technically, this chart pattern indicates a strong selling momentum following the formation of the double top pattern,” Shetti added. He also noted that the Nifty weekly chart indicated further weakness, as a doji-type candle formed last week, followed by a negative reversal in the last three weekly candles.
Short-Term Outlook: Bearish Momentum Likely to Continue
According to Shetti, the short-term outlook for Nifty remains weak. If the index falls below 22,800, it could slide toward 22,350, with any potential pullback finding resistance near 23,150. In contrast, Ajit Mishra, SVP of Research at Religare Broking, suggested that banking and financial stocks helped limit the broader downside, providing some stability amidst the broader market downturn.
Support Levels and Market Reversal for Nifty
In addition to the ongoing bearish trend, Nandish Shah, Deputy Vice President at HDFC Securities, emphasized that Nifty had dropped more than 1,000 points from its recent swing high of 23,869. According to Shah, Nifty’s next support is likely around 22,700, marking a 61.8% retracement of the entire rally from 21,964 to 23,869.
“On the higher side, previous support at 23,140 could now act as resistance,” Shah explained. This could imply further difficulty for the Nifty index in achieving any meaningful recovery in the near term.
Om Mehra, a technical research analyst at SAMCO Securities, shared a similar perspective, noting that Nifty had given a breakdown from its recent consolidation zone. As long as Nifty remains below 23,000, he suggested adopting a “sell-on-rise” approach.
“If Nifty falls below 22,800, it could lead to deeper declines, signaling more challenging times ahead for the index,” Mehra warned.
Looking Ahead: Market Uncertainty Continues Amid Global Risks
Despite the widespread losses in Indian stocks and the persistent bearish sentiment, analysts continue to emphasize that the market remains highly volatile. As global trade tensions, particularly with the United States, continue to escalate, concerns about a global recession loom large. The uncertainty surrounding these issues is likely to persist and may continue to weigh on the Indian stock market in the coming weeks.
Conclusion: Bearish Outlook Dominates Amid Global Economic Concerns
The Indian stock market faces significant challenges, with both Sensex and Nifty showing negative trends. While some technical indicators suggest possible recovery points, the overall sentiment remains bearish due to rising concerns over global trade wars and a potential global recession. Market experts continue to advise caution, with the overall market outlook remaining uncertain in the short term.
As global economic uncertainties continue to evolve, Indian investors will need to stay informed and prepared for any potential market shifts.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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