Nifty, Sensex Fall for 5th Day Amid Global Weakness

Benchmark indices Nifty and Sensex opened sluggishly again, falling for the fifth straight trading session due to weak US markets and budgetary adjustments that triggered selling pressure.

At 9:30 PM IST, the Sensex had dropped 0.62% to 79,655, while the Nifty fell 0.60% to 24,267. The market saw 1,490 shares advance, 1,427 shares decline, and 93 shares remain unchanged.

Aishvarya Dadheech, founder and CIO of Fident Asset Management, commented to Moneycontrol, "I don't think the capital gains tax is a major dampener. Given the profits investors have made in the market, the increase doesn’t significantly affect their investment mindset. Acclimatization to this 2.5% hike should be smooth, and the overall positive sentiment remains intact."

In today's session, Axis Bank share price were notably active, dropping 6% following the release of its April-June earnings, which revealed deteriorating asset quality and negatively impacted investor sentiment.

In the broader market, mid and small-cap indices also declined, losing 0.7% and 0.2%, respectively. Dadheech noted that large-cap stocks still offer valuation comfort, making it easier to generate profits compared to mid and small-caps.

The volatility index, VIX, rose 2.4% to just over 12.

Siddhartha Khemka from Motilal Oswal remarked, "With markets reaching new highs, the budget further reinforces India’s macroeconomic position amid a fragile global economy. We expect the market to quickly price in the budget and shift its focus to corporate earnings growth, which has slightly underperformed our expectations for 1QFY25. Thus, we anticipate near-term market consolidation."

All 13 indices were trading negatively, with Nifty Bank and Metal being the hardest hit, each falling over 1%. Axis Bank, SBI, and ICICI Bank were major contributors to the index's decline, with Energy, Realty, and IT sectors also slipping nearly 1% each.

Sameet Chavan, head of technical and derivatives at Angel One, stated, "The 24,300-24,250 zone is likely to act as support, with the panic low of 24,050 from budget day potentially being retested if breached. Conversely, the high of the last two sessions around 24,600 presents a significant hurdle, and the bearish engulfing high of 24,850 remains a challenging level to surpass."

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, added, "Technically, a high wave type candle pattern has formed following a reasonable decline from recent highs. The immediate support at the 10-day EMA has been broken, with the Nifty now near the 20-day EMA support around 24,270. These moving averages have held for the past 5-6 weeks, and the market's failure to stay above these levels could lead to further sharp declines."

However, Shetti noted that the formation of a bullish hammer and high wave pattern over two sessions could indicate a temporary halt in the downside momentum. A sustained move above 24,580 levels could confirm a near-term bottom reversal pattern.

Top gainers on the Nifty included SBI Life Insurance, Tata Motors, L&T, Nestle India, and Kotak Mahindra Bank. The biggest laggards were Axis Bank, Hindalco, Coal India, ICICI Bank, and Tata Steel.