Nifty Hits One-Month Low - What’s Dragging The Market & Which Sectors May Bounce Back?

The Indian stock market closed on a lower note this Friday, with the Sensex down by 720 pts to settle at 81,463. At the same time, Nifty declined 1% to 24,837. Notably, the Nifty hit its one-month low as the market marks this as the fourth week of straight losses for the Nifty, felling sustained selling pressure across sectors. 

On Friday, sectors like Nifty oil&gas, metal, PSU Bank, IT, Auto, FMCG, Private Bank and realty fell over 1%.  In the gaining streak, Nifty Pharma was the sole gainer, up by 0.5% amid the whole market turbulence. 

Sectors to perform next week 
According to Sudeep Shah, Vice President and Head of Technical and Derivative Research, SBI Securities, sectors such as Nifty Pharma & Healthcare are going to perform well amid the whole bloodbath in the markets. 

However, sectors such as IT, Defence, Oil&Gas, Realty & CPSE appear bearish and may continue to underperform in the near term, given their weak price structures and lacklustre momentum indicators.

Read More - Earnings Next Week: Over 400 Companies to Announce Q1 Results

Stocks to Watch Next Week
Shah highlights specific stocks likely to outperform in the short term. These include:
Cipla
Shyam Metalics
Apollo Hospital
Jindal Steel
CSB Bank
PG Electroplast (PGEL)

Why is the market falling?
The ongoing weakness is attributed to a combination of factors: the absence of strong positive triggers, disappointing Q1 earnings from key corporates, and lingering uncertainty on the global trade front—all of which have dampened investor sentiment.

Shah, " During the week, the index made a feeble attempt to rebound from the crucial support zone; however, the recovery lacked conviction and fizzled out quickly. The bearish undertone deepened on Friday, when the index decisively broke below two critical technical levels — the 50-day EMA and the 61.8% Fibonacci retracement of its recent upswing from 24473 to 25669. This breakdown not only reflects fading bullish momentum but also signals growing nervousness among market participants. With no clear positive cues on the domestic or global front, the market appears vulnerable to further consolidation or downside in the near term."

With no immediate domestic or global positive cues in sight, the market is expected to remain volatile and vulnerable to further consolidation or downside in the short term.

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