Indian equity benchmarks extended their slide on Tuesday, with Nifty 50 posting a sixth straight session of losses and Sensex falling for a third consecutive day. Nifty 50 dropped 132.75 points, or 0.55%, to close at 24,154.90, while Sensex declined 492.70 points, or 0.63%, to settle at 77,235.46.
The renewed sell-off came as Brent crude surged past $91 a barrel after the US-Iran ceasefire lapsed and hopes of reopening the Strait of Hormuz faded. Meanwhile, a rise in the U.S. bond yields added pressure on foreign inflows and kept the rupee under strain near 95.66 per dollar.
Banking, IT, Realty, FMCG, Financial Services, and Metal stocks bore the brunt of the selling. On the other hand, Auto, Pharma, Healthcare, Consumer Durables, Oil and Gas, and Chemical stocks bucked the trend to close higher.
Broader markets stayed cautious, with midcap and smallcap indices also slipping. Market breadth remained decisively negative, with 1,558 stocks advancing, 1,924 stocks declining, and 100 remaining unchanged on the NSE, reflecting broad-based weakness beneath the headline index moves as geopolitical uncertainty continued to dominate sentiment.
Two stock recommendations by MarketSmith India:
Buy: Data Patterns (India) Limited (current price: ₹4,737)
- Why it’s recommended: Indigenous Defence Push: Significant revenue visibility backed by a growing, multi-thousand-crore order book fueled by India's strict defence indigenization policies and higher allocation for defence electronics. IP-led Portfolio Expansion: Higher revenue contribution from advanced, proprietary electronic warfare suites, airborne surveillance radars, and counter-drone technologies, which support strong target EBITDA margins of 38–40%.
- Key metrics: P/E: 93.85, 52-week high: ₹4,955.90, volume: ₹646.62 crore
- Technical analysis: Trendline Breakout
- Risk factors: Lumpy Contract Conversion: Susceptibility to lumpy order inflows and delayed conversions of large, negotiated programs into formal contracts, impacting near-term revenue predictability. Execution & Lifecycle Delay: Advanced development programs (such as, Su-30 jammer pods or HAWK radars) carry high execution complexity and require protracted customer evaluation and testing cycles.
- Buy: ₹4,690–4,761
- Target price: ₹5,500 in two to three months
- Stop loss: ₹4,440
Buy: Sumitomo Chemical India Limited (current price: ₹563)
- Why it’s recommended: Parent Pipeline Leverage: Positioned as a key manufacturing hub for high-potential patented molecules from its Japanese parent company (SCC Japan), driving profitable custom synthesis and global launches. High-Margin Product Re-mix: Improved margin architecture due to the deliberate discontinuation of low-margin generic product lines alongside robust market traction for premium specialty chemical launches like 'Lentigo' and 'Excalia Max’.
- Key metrics: P/E: 48.90, 52-week high: ₹617.45, volume: ₹20.21 crore
- Technical analysis: Trendline Breakout
- Risk factors: Climate & Monsoon Reliance: High domestic business exposure to uneven weather patterns and shifting monsoon seasons, which directly impact regional volumes and operating leverage. Global Inventory & Pricing Pressure: Vulnerability to global chemical oversupply, industry-wide inventory destocking, and pricing competition that can compress margins despite strong local brand positioning.
- Buy at: ₹557–566
- Target price: ₹635 in two to three months
- Stop loss: ₹530
How the Nifty 50 performed on 18 August
Indian equities ended lower on Tuesday, with Nifty 50 falling 132.75 points, or 0.55%, to 24,154.90. It closed at the day’s low after opening at 24,223.85 and touching an intraday high of 24,269.65. Selling intensified late in the session, signaling caution among investors.
Market breadth was also weak, with 1,558 stocks advancing, 1,924 stocks declining, and 100 remaining unchanged, translating into an advance-decline ratio of about 0.81, indicating broader selling pressure beyond frontline stocks.
On the sectoral front, IT was the biggest drag, falling 1.93%, followed by Realty (-1.42%), PSU Banks (-1.01%), FMCG (-0.77%), and Metals (-0.61%). In contrast, selective buying supported Media (+0.40%), Auto (+0.30%), Healthcare (+0.21%), Oil & Gas (+0.20%), and Pharma (+0.08%).
The Nifty 50 has lost near-term momentum after breaching the downward-sloping trendline, follow-through buying has failed to sustain at higher levels. The index has subsequently been retraced and is currently taking support around its 50-day moving average (DMA), making the ongoing price action important for assessing the durability of the recent breakout.
Momentum indicators have also softened: the RSI has slipped to around 45, moving below the neutral 50 mark and its signal average, reflecting weakening bullish momentum without entering oversold territory. Meanwhile, the MACD is showing signs of a bearish crossover, accompanied by a negative histogram, suggesting that upside momentum is fading.
Technically, Nifty 50 has breached the key support zone of 24,300–24,250 and is currently trading marginally above its 50-day moving average (DMA), indicating a cautious near-term setup. A decisive break below 24,100–24,000 could intensify selling pressure and expose the index to a further decline toward 23,900–23,800. On the upside, the 21-DMA near 24,300 is likely to act as immediate resistance. A sustained close above this level would improve near-term sentiment and could pave the way for a recovery toward 24,700, around the 200-DMA.
How did Nifty Bank perform?
Nifty Bank opened on a negative note at 57,325.55, compared with the previous close of 57,497.80, and remained under selling pressure throughout the session. The index opened at 57,325.55, touched an intraday high of 57,584.70, slipped to a low of 57,217.60, and closed at 57,262.40, declining 235.40 points or 0.41%.
Profit booking emerged after the index tested its intraday high, pushing it below the 21-SMA (57,443.79), 50-SMA (57,459.80), and 200-SMA (57,468.23). The clustering of these moving averages around 57,440–57,470 has created a technically important resistance zone. Recent candles also indicate a narrow consolidation structure, with the latest close below this moving-average cluster tilting the near-term setup cautiously bearish.
Momentum indicators reflect weakening near-term strength. The RSI has declined to 47.36, below both the neutral 50 level and its average of 52.32, indicating that momentum is gradually shifting in favour of sellers, although the index is not yet in in oversold territory. The MACD setup has also weakened, with the histogram turning negative and the MACD structure indicating fading bullish momentum near the equilibrium zone.
The combination of RSI slipping below 50 and weakening MACD suggests that upside momentum is losing traction. Unless RSI reclaims 50–52 and MACD improves, rallies could continue to face selling pressure around the moving-average resistance cluster.
Immediate support for Nifty Bank is placed around 57,200–57,000, followed by 56,700–56,500, while the 100 SMA near 55,960 remains an important medium-term support. On the upside, the 57,440–57,500 cluster of the 21-, 50-, and 200-SMAs represents immediate resistance, followed by 57,600–57,850 and the psychologically important 58,000 level. The near-term bias remains cautious with the index trading below the moving-average cluster.
A sustained close above 57,500–57,600 could revive bullish momentum and reopen the path towards 58,000. Conversely, a decisive break below 57,000 could invite further selling toward 56,500, with banking-sector sentiment, institutional flows and broader domestic market cues likely to determine the next directional move.
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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.