Market Update: Bears Tighten Grip as Nifty Slips Below 24,900; Sensex Sheds 1,017 Points

Indian stock markets continued their downward trend for a third straight session on September 6, 2024, with both major indices suffering notable losses ahead of the much-anticipated US jobs data release.

Closing Performance: Sensex and Nifty Slide

The Sensex dropped by 1,017.23 points or 1.24%, closing at 81,183.93. Similarly, the Nifty 50 index ended at 24,852.15, down 292.95 points or 1.17%. Both indices saw significant weekly declines, with the BSE Sensex and Nifty50 losing approximately 1.5% each over the week.

Sectoral and Stock Performance

All sectoral indices ended in the red, with sectors like auto, PSU banks, oil & gas, media, telecom, IT, and realty witnessing losses between 1-3%. Some key losers on the Nifty 50 included SBI, HCL Technologies, NTPC, ICICI Bank, and BPCL. Meanwhile, the top gainers were Asian Paints, JSW Steel, Bajaj Finance, LTIMindtree, and Divis Labs.

The broader market also experienced declines, with the BSE midcap index falling by 1.4% and the BSE smallcap index slipping by 1%, despite hitting fresh record highs earlier.

Market Capitalization Loss

As a result of the sharp fall, investors saw their wealth erode by approximately Rs 5.31 lakh crore. The total market capitalization of BSE-listed companies dropped to Rs 460.40 lakh crore, down from Rs 465.68 lakh crore in the previous session.

However, amidst the downturn, nearly 290 stocks on the BSE touched their 52-week highs, including prominent names such as Ajanta Pharma, Colgate Palmolive, Godrej Industries, Muthoot Finance, Persistent Systems, and Suven Pharma.

Technical Outlook for September 9

Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas

Gedia commented that the Nifty witnessed a sharp decline after opening flat, closing with a loss of around 280 points. He highlighted that Nifty has now reached a crucial support zone between 24,850 – 24,800, coinciding with the 20-day moving average and the 38.2% Fibonacci retracement level. Despite the fall, he remains cautiously optimistic that the index will hold this support zone and suggested maintaining a short-term positive view on Nifty. The immediate resistance is expected around 25,000.

Gedia also noted the significant sell-off in the banking sector, with the daily momentum indicator showing a negative crossover. He warned that pullbacks are likely to face selling pressure, with 50,800 – 50,949 acting as an immediate resistance zone, while 50,000 – 49,700 is a crucial support area for the short term.

Ajit Mishra, SVP of Research, Religare Broking

Mishra pointed out that markets faced strong selling pressure, closing more than a percent lower due to weak global cues. The Nifty gradually declined throughout the day, breaking several support levels before ending at 24,852.15. The sell-off was widespread, with the banking and energy sectors bearing the brunt. Broader indices also dropped more than a percent.

He added that recent weakness in US markets has dented the momentum in Indian equities, making investors cautious ahead of the US jobs data. With Nifty now trading below its crucial 20-day exponential moving average (DEMA), further downside is possible, with key support seen around 24,500 at the 50 DEMA. Mishra recommended exercising caution with aggressive positions and applying strict stop losses on existing trades.

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