Analyst lists key support levels for Nifty, Nifty Bank after markets see freefall on Thursday

The market witnessed a massive sell-off on Thursday amid the October series expiry and select foreign institutional investors downgrading the Indian equity market. The analysts believe the market, especially Nifty has already closed at the support level above the 17800 zones and may see extended correction further.

“Relentless selling by FIIs is a key reason for this correction in the market. Today, Morgan Stanley downgrades India to equal weight due to outperformance by Indian markets in recent months, says Swastika Investmart Head of Research Santosh Meena.

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Meena further adds, “Inflation and slowdown in global growth momentum are other concerns amid expensive valuations. The rise in fresh covid cases in some of the countries is also disturbing the mood of the investors.”

For the first time since October 7, 2021, the BSE Sensex has fallen below the 59000-mark, down over 1150 points or 1.89 per cent, and Nifty50 has closed little above 17850-level, down 353 points or 1.94 per cent at the market close today.

The research head is seeing the first meaningful correction in the market where Nifty has slipped below its 20-DMA that has opened the door for further downside where rising 50-DMA will be the next support level.

According to Meena, with a gap area around 17650 level will the support level, followed by 17450-17250 will be the next immediate support zone. And, 18150-18300 has become an immediate supply zone on the upside.”

Similarly, Nifty Bank aided most to the Nifty50’s decline, as the banking index cracked over 1300 points to end below 39400-mark for the first time since two weeks approximately. 

In this regard, Swastika Investmart research head points out, “Bank Nifty is also showing signs of topping out from the 41500 level where it has slipped below the sacrosanct level of 40000.”

As per the Meena analysis, “On the downside, 39250 will be an immediate and important support level that may coincide with rising 20-DMA; below this, we can expect further weakness towards 38000-37700. On the upside, 40500-41000 will act as a strong supply zone.”