The Indian stock market remained under pressure for a third consecutive session on Wednesday, September 2, with the benchmark indices breaking below key levels as renewed fighting in the Middle East pushed oil prices higher, stoking inflation concerns and expectations of tighter monetary policy.
Elevated crude oil prices also drove global bond yields to multi-year highs, while a weak global market setup further weighed on investor sentiment.
Indian stock market today
The Nifty 50 closed 0.59% lower at 23,914. The index had earlier plunged to an intraday low of 23,786 before late-session buying helped it recover a large part of its losses.
The Sensex ended 0.62% lower at 76,469 after falling to a one-month low during intraday trade. The selling pressure extended to the broader market, with the Nifty Midcap 100 and Nifty Smallcap 100 declining 0.53% and 0.37%, respectively.
Renewed geopolitical tensions were a key driver behind the market sell-off, as the conflict between Iran and the US escalated. The US military reportedly launched fresh strikes against Iranian targets around the Strait of Hormuz, which President Donald Trump said were in retaliation for Tehran’s alleged attempts to lay mines in the strategic waterway and an earlier attack on a US military base.
Iran reportedly retaliated by launching attacks on US allies in the Gulf early on Wednesday. After a respite of more than a month, fighting between the US and Iran intensified over the weekend after the American military struck Iranian rocket launchers on an island in the Strait of Hormuz, saying Iran was planning to use them to deploy mines in the waterway.
The latest escalation added further pressure to crude oil prices, with Brent crude hovering near its highest level in almost six weeks amid concerns that the conflict could further disrupt energy flows through the strategically important waterway.
Higher oil prices are also pressuring bond markets. Rising crude prices have pushed global yields to their highest levels since 2008 as traders increased bets that the Federal Reserve and other central banks could raise interest rates to contain inflation.
Is more downside ahead for Nifty and Sensex?
Rupak De, Senior Technical Analyst at LKP Securities, said the Nifty 50’s breakdown from a rising channel indicates sustained selling pressure, despite an intraday recovery.
“Following a gap-down start, the Nifty 50 recovered during the day, though it ended the session with a loss. The Nifty has broken down from a rising channel amid sustained selling pressure in the market. The weakness prevailed throughout the day, despite an intraday recovery. The current bearish sentiment is likely to continue in the short term, and a sell-on-rise strategy may remain the preferred approach as long as the index remains below 24,000. On the lower end, the correction may extend towards 23,700–23,730,” De said.
Ajit Mishra, SVP, Research at Religare Broking, noted that the sharp decline has pushed the Nifty closer to its initial downside target and support around the 23,800 level, and a decisive break below this could extend the correction towards the 23,600 mark.
On the upside, he sees the previous support level of 24,000 acting as immediate resistance, followed by the 24,150 hurdle in case of a recovery. “Given the heightened volatility and global uncertainty, we reiterate our advice to maintain a cautious stance, keep position sizes light and focus on disciplined risk management,” he added.
Mahesh M. Ojha, VP — Research and Business Development at KC Securities, said immediate resistance on Sensex is placed at 76,959, followed by 77,100 and 77,250, while support levels are seen at 76,360, 76,200 and 75,900.
Can Bank Nifty hold the crucial 57,000 support?
Vatsal Bhuva, Technical Analyst at LKP Securities, said the Bank Nifty closed with a small candlestick, indicating indecision among market participants. Technically, the overall setup remains weak as the index continues to trade below its crucial 20 DMA and 200 DMA.
Additionally, the RSI has entered a bearish crossover and remains below the 50 mark, indicating weakening momentum. The broader sentiment therefore remains bearish. Going ahead, immediate support is placed at 57,000, while resistance is seen at 57,600, followed by the crucial 58,000 level,” he further stated.
Can global markets find support amid rising volatility?
Mahesh M. Ojha, VP — Research and Business Development at KC Securities, said the Nikkei faces immediate resistance at 64,700, followed by 65,200 and 65,700, while support levels are placed at 64,100, 63,700 and 63,500.
For the Hang Seng, Ojha sees resistance at 25,460, 25,600 and 25,800, while support is placed at 25,110, 24,980 and 24,800.
Taiwan’s index faces resistance at 46,400, followed by 46,700 and 47,100, while support levels are seen at 45,900, 45,700 and 45,500, according to Ojha.
Meanwhile, the KOSPI has resistance levels at 6,700, 6,850 and 7,040, while support is placed at 6,400, 6,240 and 6,080.
For the Dow, Ojha sees resistance at 52,800, followed by 53,100 and 53,500, while support levels are placed at 52,400, 52,160 and 51,940.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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