D-Street Ahead: Domestic equity benchmarks Sensex and Nifty 50 extended their losing streak for eight straight sessions for the first time in two years, dragged by persistent foreign fund outflows amid US trade tariff concerns and weak quarterly earnings by corporates. The frontline indices fell over two per cent each to log the biggest weekly market slump in the past two months.
The 30-share BSE benchmark Sensex dropped 199.76 points, by almost 0.26 per cent to settle at 75,939.21. During the day, it tanked 699.33 points or 0.91 per cent to 75,439.64. The NSE Nifty 50 index declined 102.15 points, or 0.44 per cent, to settle at 22,929.25 on Friday. The volatility index, India VIX, cooled off from 15.68, still settled slightly higher by 0.40 per cent at 15.02.
Indian stock market’s performance last week
Investors are worried about the implications of US President Donald Trump’s plans to impose reciprocal tariffs, which analysts say could hurt India the most among its Asian peers. On the weekly front, the BSE bellwether gauge plunged 1,920.98 points or 2.46 per cent, and the Nifty declined 630.7 points or 2.67 per cent, their worst in 2025 so far.
Among BSE sectoral indices, services plunged 3.16 per cent, industrials (3.03 per cent), capital goods (2.76 per cent), power (2.65 per cent), utilities (2.52 per cent), consumer durables (2.39 per cent), commodities (2.25 per cent) and realty (2.03 per cent). BSE Focused IT emerged as the only gainer.
In eight trading days to Friday, the BSE benchmark has tumbled 2,644.6 points or 3.36 per cent, and the Nifty slumped 810 points or 3.41 per cent. The BSE smallcap gauge tanked 3.24 per cent, and the midcap index dropped 2.59 per cent. Investors’ wealth eroded by ₹25.31 lakh crore in eight days of the market crash.
Tracking an extremely weak trend, the market capitalisation of BSE-listed firms dropped by ₹25,31,579.11 crore to ₹4,00,19,247 crore ($4.61 trillion) in eight days. The small-cap index is down 21.6 per cent from its record closing high on December 11, confirming bear territory. The mid-caps are 18.4 per cent below their peak closing level on September 24, 2024.
Donald Trump plans to impose reciprocal tariffs on every country taxing US imports. The imposition of these duties is likely to be delayed, helping global stocks stage a relief rally. Analysts said the potential consequences of US tariffs on the Indian rupee and the US interest rates could trigger foreign outflows, hurting domestic equities.
“The risk-averse sentiment continues to rule investors’ minds as corporate earnings are significantly lower than the market expectations during the start of the year, especially for mid- and small caps,” said Vinod Nair, Head of Research, Geojit Financial Services.
“Muted earnings trends, INR depreciation, and external factors like tariffs are expected to keep the sentiments weak in the near term, which could further push outflows. Volatility is expected to stay elevated until there is clarity on tariffs and a recovery in corporate earnings,” added Nair.
Sensex, Nifty, and Bank Nifty technical levels to watch
Technically, Sensex and Nifty 50 formed a long bearish candle on weekly charts and held lower top formation, supporting further weakness from the current levels. “We believe the current market texture is weak, and if it breaks the 22,800/75,200 support zone, it could slip to 22,600-22,500/74,600-74,300.
On the other hand, 23,000/76,500 is an important level to watch out for. Above 23,000/76,500, we could see an extension of the technical bounce back till 23,200 -23,300/77,100-77,500,” said Amol Athawale, VP-Technical Research, Kotak Securities.
Nifty 50 is trading near its three-week low, with all major sectors ending in the negative territory. The index shows signs of weakness and trades below the 21-day and 55-day moving averages. The MACD indicator has turned negative, and the MACD line has crossed below the signal line, suggesting a bearish trend.
“The key support is placed at 22,800-22750; breaching below that may take it toward 22,500, and further downside could take it to 22,000, a key support level aligned with the 100-week EMA,” said Puneet Singhania, Director of Master Trust Group. The index continues to reel under a bear attack, closing below 23,000 after spending a few days floating above this level.
Technically, multiple retests of the January low at 22,800 have weakened the significance, increasing the likelihood of a downside. “The next key support levels are now in the 22,100-22,500 range. In the event of a rebound, the first major hurdle stands at the 20-day exponential moving average (DEMA) of 23,350, followed by resistance at 23,600,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.
Technically, “Nifty has formed a triple bottom around 22,780 on the daily scale, indicating strong support. However, the red candle on daily and weekly charts signals a lack of strength in the upside recovery,” said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Intermediates Ltd.
“The 21-day Simple Moving Average (DSMA) is around 23,260, making the 23,260-23,300 zone an immediate hurdle. A decisive move above 23,300 could confirm a near-term bottom reversal pattern,” added Yedve.
Sentiment remains weak, even though the index managed to close 155 points off its low, as it continues to trade below a critical short-term moving average. “A decisive fall from 22,800 could trigger further panic in the market. On the higher end, 23,100 appears to be the immediate resistance, above which the market may see some respite,” said Rupak De, Senior Technical Analyst at LKP Securities.
Bank Nifty opened with a gap-up, experienced volatility-led profit booking, and settled the day on a negative note at 49,099. Technically, it has formed a red candle on daily and weekly charts, indicating weakness. “However, it managed to hold the weekly support level of 48,700. Sustaining below 48,700 could trigger a downside towards 48,000, while 50,000 is a key resistance,” said Yedve.
Bank Nifty fell 2.11 per cent, forming a negative candle on the weekly chart. Prices are trading below the 21-day and 55-day EMAs, indicating weakness. Strong resistance is at 49,650; a breakout above this level may push it toward 50,200. “On the downside, support is at 48,700, this week’s low, and breaking below it could increase selling pressure toward 48,000,” said Singhania.
D-Street trading strategy for next week
Amid the prevailing pessimism, the relative strength of two key sectors—banking and IT—helped cushion the broader decline. Traders should closely monitor the performance for signs of a potential directional shift. “Despite oversold conditions, we maintain a cautious outlook on broader indices and advise against bottom fishing or averaging down on losing positions,” said Ajit Mishra.
According to Singhania of Master Trust Group, the Nifty 50 index trades below horizontal support of 23,350, which may act as a strong resistance level. Unless it sustains above 23,350, a sell-on-rise approach is preferred.
For Bank Nifty, the overall market tone appears bearish, suggesting a sell-on-rise approach until a clear breakout occurs. Traders should watch support and resistance levels closely for further market direction,” said Singhania.
Volatility, though uncomfortable, is essential for a healthy financial outcome. Market returns are cyclical, and navigating these cycles—weathering downturns and capitalizing on upswings—is key. According to experts, timing the exact bottom is nearly impossible.
“While near-term headwinds persist, history suggests uncertainty often breeds the best long-term opportunities. Staying focused on high-quality businesses with strong fundamentals at reasonable valuations remains prudent,” said Krishna Appala, Sr. Research Analyst at Capitalmind Research.
Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.
