Stock market recap: Indian equities closed lower on Friday, snapping a two-day winning streak, as renewed tensions in the Middle East and a domestic regulatory shock outweighed resilient buying in select sectors.
The Nifty 50 fell 65.35 points, or 0.27%, to settle at 24,570.65, while the Sensex dropped 463.74 points, or 0.59%, to 78,491.02. Sentiment turned cautious at the open after Iran signalled new restrictions on vessel movement through the Strait of Hormuz, pushing crude oil prices higher. A weak overnight lead from Wall Street further weighed on market sentiment.
The bigger domestic trigger was RBI's draft proposal barring non-bank lenders from offering revolving credit products, which sparked a sharp sell-off in NBFC and financial stocks. Bajaj Finance dropped nearly 6% and Bajaj Finserv more than 4%, dragging the Financial Services and Private Bank indices down more than 1% each. IT and Auto gained, rising more than 1% each, led higher by TCS, Reliance and Mahindra & Mahindra. India VIX edged up 1.7% to 12.37, signalling a modest rise in caution among traders.
Two stock recommendations by MarketSmith India:
Buy: Waterways Leisure Tourism Ltd (current price: ₹842)
Why it’s recommended: Exposure to growing cruise tourism, beneficiary of rising leisure spending, strong tourism industry tailwinds, growing domestic travel demand, premium travel positioning, expansion of cruise routes, increasing tourism infrastructure, opportunity from international tourists, growing experiential travel demand, potential operating leverage, brand-building opportunities, diversified onboard revenue potential, government focus on cruise tourism, large underpenetrated Indian market, and long-term tourism growth potential.
Key metrics: P/E: NA | 52-week high: ₹925.65 | Volume: ₹11.03 crore
Technical analysis: Trendline Breakout
Risk factors: Highly discretionary spending exposure, seasonal tourism demand, high operating costs, fuel price volatility, capital-intensive business, economic slowdown affecting travel, regulatory and maritime risks, weather-related disruptions, safety and operational risks, competition from other travel options, dependence on passenger occupancy, geopolitical impact on tourism, high maintenance expenses, limited listed track record, and valuation risk after listing.
Buy: ₹834–846
Target price: ₹900 in two to three months
Stop loss: ₹815
Buy: Hindalco Industries Ltd (current price: ₹1,059)
Why it’s recommended: Integrated aluminium producer, global leadership through Novelis, diversified aluminium and copper business, strong downstream product portfolio, beneficiary of EV and lightweighting trends, growing demand for recycled aluminium, strong global customer base, expansion in value-added products, beneficiary of infrastructure growth, long-term aluminium demand tailwinds, strong cash flow potential, improving operational efficiencies, diversified geographic presence, recycling capacity expansion, and strong parentage of Aditya Birla Group.
Key metrics: P/E: 14.79 | 52-week high: ₹1,176.00 | Volume: ₹965.25 crore
Technical analysis: Reclaimed its 100-DMA
Risk factors: Aluminium and copper price volatility, cyclical metals industry, high energy cost exposure, global economic slowdown risk, Novelis earnings volatility, high capital expenditure requirements, raw material price fluctuations, currency fluctuation impact, environmental and regulatory risks, China-led metal oversupply risk, auto sector slowdown impact, interest rate and financing risks, project execution risks, geopolitical and trade risks, and earnings volatility from commodity cycles.
Buy at: ₹1,048–1,064
Target price: ₹1,195 in two to three months
Stop loss: ₹990
Nifty 50: How the Benchmark Index Performed on 7 August
Indian equities ended Friday’s session on a subdued note, with the Nifty 50 closing at 24,570.65, down 65.35 points or 0.27%, after trading between 24,522.75 and 24,630.40. The index recovered from its intraday low but remained below the previous close of 24,636, reflecting continued consolidation near 24,600. Sectoral performance was mixed, with Nifty Auto (+1.84%) and IT (+1.42%) providing support. Meanwhile, Financial Services (-1.43%) and Private Bank (-1.04%) were the major drags. Metals and PSU Banks also finished higher.
Importantly, the broader market was considerably more balanced than the headline index suggested, with 1,685 stocks advancing, 1,664 stocks declining, and 119 remaining unchanged, translating into a near-neutral advance-decline ratio of 1.01:1. Recent market positioning has remained cautious amid global uncertainty and shifting foreign institutional flows.
From a technical perspective, momentum indicators continue to favour the bulls, albeit with signs of moderation. The 14-day RSI stands at 60, comfortably above the neutral 50 mark, indicating sustained positive momentum without entering overbought territory.
Meanwhile, the MACD remains above its signal line and continues to print positive histogram bars, confirming that the prevailing intermediate-term trend remains constructive. The index is also trading above its 21- (24,246), 50- (23,983), and 100-DMA (23,834), highlighting strong trend support. Although it remains marginally below the 200-DMA at 24,763, which continues to act as a key long-term resistance. While momentum remains positive, the flattening price action suggests the market may require a decisive catalyst before extending its next directional move.
Technically, 24,600–24,550 now serves as the immediate support zone, followed by stronger support around 24,400 and the 21-DMA near 24,217. On the upside, 24,675–24,770 represents the first resistance zone, coinciding with the recent swing high and the 200-DMA, while a sustained breakout above this region could pave the way toward 24,900–25,000.
How did the Nifty Bank perform yesterday?
The Nifty Bank opened on a negative note at 57,882.00 and saw mild profit-booking during the session after testing an intraday high of 57,994.45. Selling pressure gradually intensified, dragging the index to an intraday low of 57,686.55 before it recovered marginally to close at 57,746.45, down 317.20 points (-0.55%).
Despite the weak close, the index continued to trade above its 21-DMA (57,564.76), and remained above its 200-DMA (57,479.04), indicating that the broader intermediate trend remains constructive. The day's candle reflects a relatively narrow trading range, highlighting indecision between buyers and sellers as the index consolidates after its recent advance. This price behaviour resembles a short-term consolidation phase, suggesting that participants are awaiting a fresh trigger before committing to the next directional move.
The RSI is placed at 53.07, comfortably above the neutral 50 mark, indicating that momentum remains mildly positive despite the day's decline. However, the indicator has flattened, suggesting that bullish momentum has slowed. The MACD remains above the zero line, but the MACD and signal lines have converged significantly. On the other hand, the histogram has almost disappeared, reflecting weakening upside momentum and a lack of strong directional conviction. Although there is no confirmed bearish crossover yet, traders should closely monitor the indicator over the next few sessions. If the RSI sustains above 50 and the MACD remains in positive territory, the broader trend is likely to remain range-bound with a slightly positive bias.
On the technical front, immediate support is at the 21-DMA near 57,565, followed by the 200-DMA around 57,480. A decisive breach below these levels could expose the index to the 50-DMA near 56,975, while stronger support is positioned near the 100-DMA at 55,734. On the upside, immediate resistance is seen around 58,000, followed by the recent swing high zone near 58,400–58,600. The index continues to consolidate after its recent recovery, and a sustained move above the resistance zone could revive bullish momentum. However, with mixed global cues and cautious investor sentiment ahead of key domestic and global macro developments, traders should expect stock-specific action. On the other hand, the index remains within its current consolidation range.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O'Neil. You can access a 10-day free trial by registering on its website.
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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.