Will Nifty Register Ninth Straight Weekly Loss? Analysts Weigh In

Nifty Faces Potential Ninth Consecutive Weekly Loss Amid Market Volatility

As the Nifty 50 index struggles to maintain momentum, analysts are closely monitoring its trajectory as it approaches a potential ninth consecutive weekly loss.

The Nifty 50 has seen a significant downturn, with analysts weighing in on the implications of recent market movements and external pressures.

Nifty’s Recent Performance

After a brief surge of over 1.6% to reach a mid-week high of 22,776, the Nifty 50 index reversed course dramatically, plummeting 2.6% in the last two trading days. This decline has left the index on the brink of marking its ninth consecutive weekly loss, a streak not seen since April 2001. Over the past eight weeks, the Nifty has fallen by 8.7%, and if it closes below 22,422, it will confirm this unfortunate milestone.

Market Sentiment and External Factors

The recent 25 basis points rate hike by the Reserve Bank of India (RBI) has contributed to a bearish sentiment in the market, raising concerns about tighter financial conditions. Ponmudi R, CEO of Enrich Money, pointed out that foreign portfolio investors have extended their selling streak to ten consecutive days, which, combined with a weakening rupee against the US dollar, adds to the challenges faced by domestic equities.

Additionally, the minutes from the US Federal Reserve and hawkish comments from Governor Christopher Waller have heightened concerns regarding potential further rate increases, which could dampen global risk appetite. Despite these headwinds, the GIFT Nifty has shown some encouraging signs, indicating a potential positive start for the NSE benchmark index.

Technical Analysis Insights

Technical analysts are closely watching key support and resistance levels. Ajit Mishra from Religare Broking noted that the Nifty has retested the April 2026 low of 22,182.55. A decisive break below this level could lead to further declines towards the 21,700–22,000 range. Conversely, Mishra identifies 22,400 as an immediate hurdle, with potential resistance at 22,700–22,800.

See also  SEBI Shares Trade Data with Jane Street, Seeks Clarification on Allegations

Ponmudi also highlighted the Nifty’s pattern of lower highs and lower lows, indicating a continued dominance of sellers. He emphasized the importance of the 22,500–22,600 resistance zone, suggesting that a sustained move above 22,600 could pave the way for a recovery towards 22,800. On the downside, the 22,200–22,180 range remains critical, with a break below potentially accelerating declines towards the psychological 22,000 mark.

Investor Strategy Amidst Uncertainty

With the current market setup characterized by heightened volatility, analysts recommend that market participants adopt a cautious approach. Mishra suggests aligning positions accordingly and considering a hedged strategy, especially as the ongoing earnings season unfolds. The widening spread between moving averages and the oversold Relative Strength Index (RSI) further underscore the prevailing weak bias in the market.

Key Highlights

  • Nifty 50 faces potential ninth consecutive weekly loss, last seen in April 2001.
  • Index has declined by 9.5% over the last nine weeks, with a critical support level at 22,422.
  • Foreign portfolio investors have sold for ten consecutive days, impacting market sentiment.
  • Technical analysts highlight key resistance at 22,400 and support at 22,200–22,180.
  • Market participants advised to adopt a hedged approach amid rising volatility.

Investor Note: As the Nifty approaches a critical juncture, investors should remain vigilant and consider strategic positioning to navigate potential market fluctuations.

Spread the Word

Stay Ahead of the Market 📈

Subscribe to our weekly newsletter

Get your weekly market summary from FinBrooks Insights and smart financial lessons from FinBrooks Academy delivered straight to your inbox every weekend!

Leave a Reply

Your email address will not be published. Required fields are marked *