The Indian benchmark NIFTY50 index extended its losing streak for a fifth consecutive session on Friday, July 24, closing down 102.15 points, or 0.43%, at 23,767.45. The broader market faced significant pressure from surging crude oil prices, persistent foreign institutional investor (FII) selling, and global market weakness, though analysts eye crucial support levels for a potential bounce. The Sensex also fell, shedding 331.62 points, or 0.43%, to settle at 76,059.77, marking a bruising week for Indian equities.[indiainfoline+5]
Global Headwinds Drive Market Down
Indian markets opened lower on Friday, tracking weakness in global markets. A surge in crude oil prices, with Brent crude briefly topping $100 per barrel amid escalating geopolitical tensions in West Asia, fueled inflation fears and dampened investor sentiment globally.US markets closed sharply lower on Thursday, with the Dow Jones falling 1.0%, the S&P 500 declining 1.2%, and the Nasdaq Composite tumbling 2.2%, marking their weakest session in about a month.This sell-off was driven by steep losses in major tech companies like Alphabet and Tesla following their earnings reports, alongside rising US Treasury yields.Asian markets also traded sharply lower, with Japan's Nikkei down around 2.9% and South Korea's KOSPI falling nearly 3.7%.[youtube+10]
Persistent selling by Foreign Institutional Investors (FIIs) further exacerbated the downward pressure on Indian markets. FIIs offloaded equities worth approximately ₹2,999 crore on Thursday, July 23, while Domestic Institutional Investors (DIIs) were net buyers, injecting around ₹2,947 crore. This sustained outflow from foreign funds, combined with a weaker rupee trading around ₹96.6 against the US dollar, contributed to the cautious market mood.[youtube+2]
Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd., noted that Indian equities are likely to remain under pressure in the near term. "Elevated crude oil prices remain a key overhang. Continued geopolitical tensions in West Asia, Brent crude oil prices hovering near a six-week high above US$98/bbl, weakness in the rupee and persistent Foreign Institutional Investor (FII) selling are expected to keep investor sentiment cautious," Khemka said. Higher crude oil prices raise concerns about inflation and India's import bill, prompting investors to remain vigilant.[goodreturns+2]
Key Support Levels Eyed for Rebound
Technical indicators suggest the NIFTY50 is approaching an important support zone after extending losses for the fourth straight trading session on Thursday. The index formed a high-wave candlestick pattern on the daily chart and maintained a series of lower highs and lower lows, indicating that selling pressure remains intact. However, analysts believe crucial support levels could trigger a bounce.[goodreturns+1]
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, observed that a small negative candle formed on the daily chart with minor upper and lower shadows, signaling weakness with volatility. Shetti highlighted that the NIFTY is moving towards crucial support levels around 23,700-23,650. He believes this area, which includes a previous significant opening upside gap from June 15 and an ascending trendline support, will be a crucial base. "There is a possibility of sizable bounce back from the lower supports in the near term," Shetti said, adding that immediate resistance is at 24,000 levels.[livemint+4]
Riyank Arora, Associate Vice President – HNI & Derivatives, Hedged.in, stated that the immediate support for NIFTY50 is between 23,800 and 23,750, followed by a stronger support zone near 23,650. On the upside, resistance is seen around 23,950 to 24,050. Arora emphasized that a sustained move above this resistance range is necessary to revive bullish momentum. Sachin Gupta, VP - Technical Research at Choice Broking, noted that the highest Put Open Interest (OI) was concentrated at the 23,800 strike, while the highest Call OI was at the 24,000 strike. This highlights 23,700-23,750 as the immediate support zone and 23,950-24,000 as the first resistance area. Gupta suggested that unless NIFTY50 reclaims higher levels, it will likely trade within the 23,700-24,000 range, with a sideways to bearish bias.[livemint+6]
GauravUdani, Founder of ThinCredBlu Securities, predicted NIFTY to open lower around 23,700, indicating a weak start. He identified 23,450-23,550 as the immediate support zone, stating that holding this range is crucial to prevent further downside. A breakdown below this support could accelerate selling pressure.[livemint+2]
Domestic Challenges and Sectoral Performance
Beyond global cues, domestic factors also influenced market sentiment. Infosys, India's second-largest IT services company, saw its shares decline on Friday after tempering the upper end of its full-year revenue forecast to between 1.5% and 3% amid ongoing macroeconomic uncertainty. This news contributed to weakness in the IT sector.[timesofindia+1]
Sectoral performance on July 24 was mixed. The auto sector emerged as the worst-performing, declining 1.10% due to concerns over rising crude oil prices, which could increase input and fuel costs. Energy,metal, and realty sectors also remained under pressure, affected by escalating geopolitical tensions and higher crude prices. However, IT and media sectors showed some resilience. HCL Technologies, for instance, gained after strong Q1 results and an announcement about a new technology center.[indiainfoline+1]
Vinod Nair, Head of Research, Geojit Investments Limited, stated that market sentiment will likely remain under pressure in the near term. "Sustained oil prices in a higher range could begin to adversely impact key macroeconomic indicators and growth dynamics," Nair said. He alsonoted that Washington's new tariffs on imports added another headwind for export-driven economies, with technology-heavy markets being particularly affected as higher rates weigh on growth.[indiainfoline+2]
The India VIX, a measure of market volatility, rose to around 14.03, signaling increasing, but not extreme, volatility expectations. While the market breadth turned positive towards Friday's close, with the Midcap 50 index ending in the green, this suggests the correction has been more index-heavy and sector-specific rather than a broad-based capitulation, offering a modestly encouraging sign for the near term.[money+1]
Outlook Remains Cautious
The NIFTY50's repeated falls underscore a cautious market. While some analysts anticipate further consolidation, the index's proximity to key support levels presents a potential inflection point. A decisive move above the 24,000 mark could signal a temporary halt to the recent decline and pave the way for a recovery towards 24,200. However, a sustained breach below the 23,800-23,750 zone could accelerate downside momentum towards 23,500 in the coming weeks. Tradersand investors are advised to maintain a cautious approach, closely monitoring global developments, crude oil prices, and FII activity for fresh directional cues.[goodreturns+2]
