On October 25th, the Indian benchmark indices, Sensex and Nifty, experienced a decline for the fifth consecutive day. The Nifty settled near 19,100 points, while by the end of the trading day, the Sensex closed at 64,049.06, marking a decline of 522.82 points or 0.81%. In contrast, the Nifty dropped by 159.60 points or 0.83%, finishing at 19,122.20.
In this trading environment, about 1,162 stocks closed with gains, while 2,404 showed a downward trend. Remarkably, 100 stocks remained unchanged. Not only the major stocks but also the mid and small-cap shares felt the selling pressure. The BSE Midcap and Smallcap indices both closed with a decline of 0.5%.
From a sectoral viewpoint, the metal index showed an upward trend of about 1%. However, other sectors such as banking, power, real estate, capital goods, pharmaceuticals, and IT saw a drop ranging from 0.5 to 1%. Market experts suggest that investor sentiment has been affected adversely. The ongoing geopolitical tension in West Asia is consistently applying pressure on the market. Despite a dip in oil prices and positive expectations for quarterly results, investors seem to maintain a cautious approach. The anticipation of prolonged high interest rates might dampen economic growth. However, the increasing geopolitical tensions and the rising prices of mid and small-cap shares make large-cap shares appear more attractive to investors.
Amid mixed global cues, the market continued its downward trajectory, with the Nifty gradually sliding below its significant support of 19,200 and eventually closing at 19,150.35. Most of the sectoral indices closed in the red, with real estate, finance, and IT bearing the most significant losses. Broader indices remained under pressure.
Today, the Nifty broke below the lower band of the broadening formation at 19,200. Its next major support appears to be the 200 EMA, which currently stands around the 18,830 mark, aligning with the previous consolidation range’s neckline. Volatility might increase due to weak global cues and the expiration of October derivatives contracts. Traders should decide their positions keeping these factors in mind and focus primarily on index heavyweights.
Post the ‘head and shoulder’ breakout, today’s trading session witnessed a continuation of the selling trend. The Nifty formed another bearish candle on the daily chart. The overall market trend has turned negative, but at present, the Nifty seems considerably oversold. There is potential for a relief rally in the coming sessions.
In summary, the market witnessed a decline for the fifth straight day. The Nifty’s downtrend persisted on October 25th, albeit with a minor intraday spike. The Nifty might find support around 19,011, which is a gap support, whereas on the upside, resistance is anticipated between 19,229 and 19,333.
