Indian Stock Market Crashes on Friday Amid Multiple Headwinds
The Indian stock market witnessed a sharp downturn during the Friday trading session, erasing strong gains from the first half and closing significantly lower. This decline was driven by a confluence of negative factors that dampened investor sentiment across the board.
Key Factors Behind the Market Fall
Foreign Institutional Investor (FII) outflows played a major role in the sell-off, as overseas investors pulled capital from Indian equities. Additionally, weak Q3 earnings trends, particularly in the information technology and consumption sectors, raised concerns about corporate profitability. The continued weakness in the Indian Rupee further exacerbated the situation, making imports more expensive and impacting certain industries.
Renewed fears surrounding former US President Donald Trump's proposed tariffs on Greenland, affecting NATO countries, added to the global uncertainty, which spilled over into Indian markets. These combined pressures led to a broad-based decline across major indices.
Index Performance and Technical Outlook
The Nifty 50 index finished 241 points lower at 25,048, while the BSE Sensex crashed 769 points to close at 81,537. The Bank Nifty index nosedived 727 points, ending the session at 58,473.
Sumeet Bagadia, Executive Director at Choice Broking, provided insights into the market sentiment. He noted that the Indian stock market bias is weak, as the Nifty 50 index has broken below the 200-day exponential moving average (DEMA) support at 25,100 and is struggling to sustain at higher levels. According to Bagadia, the price action indicates selling pressure at elevated levels and a lack of follow-through buying.
"The Indian stock market bias is weak as the Nifty 50 index has given a decisive breakdown at 200-DEMA placed at 25,100," Bagadia stated. "Now, the 50-stock index has crucial support placed at 24,900. Breaking below this support means more selling pressure, and in that case, the key index may find the next support at the 24,500 to 24,400 band, the next looking demand zone on the technical chart pattern. On the upper side, the index needs to close above 25,500 to strengthen the conviction of bulls."
Stock Recommendations from Choice Broking
Despite the overall weak sentiment, Sumeet Bagadia identified three stocks for potential short-term buying opportunities:
- Hindustan Unilever Limited (HUL): Buy at ₹2,410, Target ₹2,600, Stop Loss ₹2,330.
- HUL's share price is currently in a range-bound consolidation phase after a corrective move from higher levels. On the daily chart, the price has recently bounced from lower levels and is now trading around the 200 EMA zone, indicating an attempt to stabilise.
- Tech Mahindra: Buy at ₹1,701, Target ₹1,800, Stop Loss ₹1,630.
- Tech Mahindra's share price is showing a strong bullish continuation setup on the daily chart. After a steady uptrend, the stock formed a falling channel, which is a classic bullish continuation pattern. The recent breakout above the channel resistance confirms a resumption of upward momentum.
- Price is trading comfortably above the 20 EMA and 50 EMA, both of which are sloping upward, reflecting strong short-term strength. The stock is also holding well above the 100- and 200-EMA levels, reaffirming the broader bullish trend.
- The breakout has been supported by a noticeable pickup in volumes, while pullbacks within the channel were accompanied by lower volumes, highlighting healthy accumulation.
- Oil and Natural Gas Corporation (ONGC): Buy at ₹245.50, Target ₹260, Stop Loss ₹238.
- ONGC share price is trading in a sideways-to-positive structure on the daily chart after recovering from lower levels. The stock has reclaimed the 20 EMA and 50 EMA, indicating improving short-term momentum.
- However, the 200 EMA remains a crucial resistance, near which the stock is currently consolidating. A sustained close above this level would be essential to confirm a trend reversal and attract fresh buying interest.
- Volume activity has remained steady, suggesting gradual accumulation rather than aggressive buying.
Key Takeaways and Disclaimer
Market sentiment is currently weak, affecting key indices like Nifty 50 and Sensex. Key support levels for Nifty 50 are at 24,900, with potential further declines if broken. Recommended stocks for buying include HUL, Tech Mahindra, and ONGC, each with specific targets and stop-loss strategies.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
