Stock Market: Will Nifty Hold 24,800 Or Break Further? Experts Decode Key Levels & Sector Outlook

The Indian stock market wrapped up a turbulent week on a sour note, with the Sensex tumbling 720 points to close at 81,463 and the Nifty shedding nearly 1% to settle at 24,837 — its lowest closing level in over a month. This marked the fourth consecutive week of losses for the benchmark index, signaling persistent bearish sentiment across sectors.

Sectoral Sell-Off Intensifies, Pharma the Lone Gainer
Friday's market action witnessed broad-based selling, with major sectoral indices such as Nifty Oil & Gas, Metal, PSU Bank, IT, Auto, FMCG, Private Bank, and Realty all declining by over 1%. The only exception was Nifty Pharma, which eked out a 0.5% gain, underlining its defensive appeal amid high volatility.

“Sectors such as Pharma and Healthcare are likely to outperform amid the broader market bloodbath,” said Sudeep Shah, Vice President and Head of Technical and Derivative Research at SBI Securities.

On the flip side, Shah remains cautious on IT, Defence, Oil & Gas, Realty, and CPSE, citing weak price structures and lacklustre momentum indicators.

Stocks to Watch Next Week
As volatility looms, Shah highlighted six stocks that may buck the downtrend in the short term:
Cipla
Shyam Metalics
Apollo Hospitals
Jindal Steel
CSB Bank
PG Electroplast (PGEL)

These counters are expected to show relative strength despite the prevailing negative sentiment.

Why Are Markets Falling?
The latest market decline stems from a confluence of domestic and global factors, including:
Lack of strong positive triggers
Disappointing Q1 results from several major corporates
Persistent uncertainty in global trade deals, especially between the US and India
Aggressive FII outflows in July

“During the week, the index made a feeble attempt to rebound from a crucial support zone; however, the recovery lacked conviction and fizzled out quickly,” explained Shah.
“The bearish undertone deepened on Friday when the Nifty decisively broke below two critical technical levels — the 50-day EMA and the 61.8% Fibonacci retracement of its recent 
upswing from 24,473 to 25,669.”

This technical breakdown has heightened nervousness, with analysts cautioning against any immediate bullish bets.

Key Support and Resistance Levels to Watch
According to Shah, 24,600–24,550 (100-day EMA zone) will act as immediate support for the Nifty. A decisive breach of 24,550 could trigger a correction down to 24,200. On the upside, the 20-day EMA zone of 25,100–25,150 is the next hurdle.

“The medium-term outlook remains cautious. The Nifty is trading in a narrow range on the monthly chart, reflecting a tug-of-war between bulls and bears,” Shah added.
A sustained breakout above 25,250 could reignite bullish sentiment, while a breakdown below 24,400 may deepen the correction.

“If the 24,800 support is breached, Nifty may test 24,500–24,450 levels. A bounce is possible, but sustained gains will only come if Nifty decisively breaches 25,050, which continues to act as a strong resistance,” said Sugandha Sachdeva, Founder of SS WealthStreet.

Earnings Season: More Disappointment Than Hope
The ongoing earnings season has largely underwhelmed market expectations. A slew of frontline companies has reported results below analyst forecasts, failing to provide the much-needed bullish catalyst.

“Weak Q1 results, coupled with global headwinds and lack of fresh domestic triggers, have deepened the market’s bearish undertone,” said Shah.

Until stronger earnings or macroeconomic cues emerge, the Nifty is expected to remain in a consolidation zone between 24,400 and 25,250.

Bank Nifty: Outperformance Amid Caution
Interestingly, Bank Nifty outperformed broader indices last week, closing with a modest gain of 0.44% at around 56,500, supported by selective buying in heavyweight banks.
However, Shah warns that the index remains technically constrained.
 

“Despite repeated attempts, Bank Nifty has failed to break past the resistance zone of 57,300–57,400, forming a Gravestone Doji candlestick pattern — a sign of market indecision and potential reversal,” he explained.

Support levels for Bank Nifty lie at 56,200–56,100, with any sustained move below 56,100 likely to push the index toward 55,500 in the near term.

FII Activity: From Bullish to Cautious
A critical shift in foreign investor sentiment has also weighed heavily on Indian markets. After being net buyers from March to June 2025 with an inflow of ₹24,011 crore, FIIs have pulled out ₹28,528 crore in July alone.
This sharp reversal is linked to:
A 0.88% rise in the U.S. dollar, reducing the attractiveness of Indian assets
Weak corporate earnings
Absence of progress on India-U.S. trade talks
Mounting expectations of a U.S. Fed rate cut

“The FII long-short ratio in index futures has fallen sharply from 36.4 on June 30 to 14.83 on July 24. Historically, when this ratio dips below 15, markets often see limited downside due to potential short-covering rallies,” noted Shah.

Trade Deal Uncertainty Adds to Market Jitters
Sachdeva, Founder of SS WealthStreet, echoed similar concerns.

“Nifty witnessed a decline for the fourth consecutive week. The fall began after hitting key resistance near the 25,050 levels,” she said.

“The slide is largely due to the stalled U.S.-India trade deal and the aggressive FII outflows, which may close July with a total drawdown of around Rs 30,000 crore.”
She added that while some optimism exists around the India-UK Free Trade Agreement (expected to boost bilateral trade by $34 billion), geopolitical concerns persist.

Key Events to Watch Next Week
'Global markets this week/Packed news flow coming up: 
1. Trump is on a trip to Scotland 
2. EU-US trade talks lead to a 15% tariff deal . This brings a lot of predictability and stability to the biggest trade relationship of Euro 1.9 trillion . US stock futures and European stock futures are up. Asian markets are mixed.
3. US-China trade talks take place in Stockholm this week. There was a report that further tariff measures have been postponed by 90 days. Markets will watch the outcome of these talks closely .
4. The tariff deadline is August 1st, expect a flurry of letters imposing 15% tariffs on many countries and a postponement of the August 1st deadline at the last minute 
5. US FOMC meets , expected to hold rates steady . BOJ also meets this week, again expected to stay on hold.
6. Key earnings, especially from Mag7 constituents will shape the trajectory of US markets that have hit all-time highs repeatedly in the last two weeks 
7. July US Jobs report on Friday, expected at 115,000 , will give an idea of the strength of the US labour market  
8. US PCE inflation data(mildly up)  and US Q2 GDP data( strong at 2.5% growth YoY) will be the other key releases this week. 
Intense focus will be on Trump tariff deadlines, on the US data and on the US Fed commentary,' said market expert Ajay Bagga.

Any surprise development — especially positive cues on global trade — could act as a trigger for reversal in sentiment.

Volatility to Stay, Sector Rotation Critical
The Indian stock market is expected to remain volatile next week, with sector rotation playing a key role. Defensive sectors like Pharma and Healthcare may continue to see inflows, while IT, Oil & Gas, and Realty could remain under pressure.

With key technical levels under threat, and global uncertainties looming large, investors are advised to maintain caution and stay stock-specific.

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


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