Stock market recap: Indian equities extended their losing streak to a third straight session on Wednesday as Brent crude touched $100 per barrel for the first time since late July, deepening worries over inflation and import costs.
Nifty 50 fell 203.60 points, or 0.86%, to close at 23,431.50, while Sensex dropped 813.35 points, or 1.08%, to settle at 74,764.23. IT was the standout laggard, declining for a sixth consecutive session, as Coforge, Infosys, and TCS fell sharply amid continued Fed rate-hike concerns.
Nifty IT declined more than 3%. Banking, FMCG, and Auto also ended lower, while heavy primary market activity added to selling pressure as several IPOs opened during the week. Metals bucked the trend to close firmly higher, offering some support. The rupee weakened further against the dollar, and continued foreign institutional selling weighed on sentiment. Market breadth remained weak, with 1,484 stocks advancing, 2,092 stocks declining, and 100 remaining unchanged. With crude prices near multi-month highs and global rate expectations still in flux, near-term volatility is likely to persist.
Two stock recommendations by MarketSmith India:
Buy: VA Tech Wabag Limited (current price: ₹2,125)
- Why it’s recommended: Long-term revenue visibility from large domestic municipal water-security projects such as the Jal Jeevan Mission, industrial expansion into seawater desalination and Zero Liquid Discharge, asset-light strategy, increasing focus on technology-driven EPC, and long-term high-margin O&M contracts supporting margin expansion and improved return ratios.
- Key metrics: P/E: 31.62, 52-week high: ₹2,253.50, volume: ₹523.54 crore
- Technical analysis: Trendline Breakout
- Risk factors: Execution delays, working-capital lock-up in government EPC projects, payment delays, prolonged land and permit approvals, extended working-capital cycles, significant overseas revenue exposure across the Middle East, Africa, and Eastern Europe, geopolitical volatility, and currency fluctuations.
- Buy: ₹2,104–2,136
- Target price: ₹2,400 in two to three months
- Stop loss: ₹1,990
Buy: Bharat Heavy Electricals Limited (current price: ₹433)
- Why it’s recommended: Thermal-power order resurgence, a multi-year order backlog exceeding ₹2.4 trillion, India’s renewed thermal-capacity expansion and utility-scale power projects, strong long-term revenue visibility, and strategic diversification into high-margin segments such as Vande Bharat trainsets, defence systems, nuclear equipment, and green hydrogen, reducing dependence on core thermal cycles.
- Key metrics: P/E: 60.43, 52-week high: ₹446.50, volume: ₹365.53 crore
- Technical analysis: Trendline Breakout
- Risk factors: Protracted project-execution schedules, slow receivables collection from state power utilities, structural working-capital lock-up, pressure on operating cash flows and margins, volatile steel and copper prices, pricing pressure, and aggressive competition from domestic and global EPC peers.
- Buy at: ₹429–435
- Target price: ₹480 in two to three months
- Stop loss: ₹410
Nifty 50 recap
On 9 September, Indian equities ended lower, extending their recent weakness amid elevated crude oil prices, geopolitical concerns in the Middle East, and sustained pressure on technology stocks. Nifty 50 closed at 23,431.50, down 203.60 points or 0.86%, finishing at the day’s low after trading between 23,431.50 and 23,571.55, indicating selling pressure into the close. Sensex also remained under pressure throughout the session. Market breadth was distinctly negative, with 1,484 stocks advancing, 2,092 stocks declining, and 100 remaining unchanged, translating into an advance-decline ratio of roughly 0.71:1. On the sectoral front, Nifty IT was the biggest drag, falling 3.24%, followed by Realty (-2.23%) and Financial Services (-1.23%). On the other hand, Metals bucked the broader weakness with a 1.79% gain. Higher crude prices and continuing U.S.-Iran tensions remained key macro risks, while value buying in metals provided limited support.
Nifty 50’s technical structure has weakened materially, with the index closing at 23,431.50, down 0.86%, and forming a strong bearish candle near the day’s low. The latest decline has resulted in a decisive break below the rising trendline that had guided the recovery from the April lows, indicating a deterioration in the medium-term price structure. The index is also trading below its key short- and medium-term moving averages, reinforcing the prevailing bearish bias. Momentum indicators remain weak: the RSI has slipped to 26.44, entering oversold territory and reflecting intense selling momentum. Meanwhile, this raises the possibility of a near-term technical pullback; a sustained reversal signal is yet to emerge. The MACD remains firmly negative, with the MACD line below the signal line and the histogram in negative territory, confirming strengthening downside momentum.
The index closed decisively below the key 23,600–23,500 zone, reflecting continued weakness in the near-term price structure. On the downside, a sustained decisive break below 23,300–23,250 could intensify bearish momentum and extend the ongoing corrective move toward 23,000. Conversely, any near-term recovery is likely to face initial resistance in the 23,800–24,000 zone.
How did Nifty Bank perform?
Nifty Bank opened on a negative note at 56,498.85 and briefly recovered to an intraday high of 56,743.05. However, profit booking emerged near higher levels, dragging the index to its intraday low and closing at 56,295.55, down 482 points or 0.85%. The index closed below its 21-, 50-, 100-, and 200-SMA, confirming deterioration across short- and medium-term trends. The session formed a strong bearish candle with no lower shadow, indicating that sellers retained control through the close. The breakdown below the recent consolidation range and the 100-SMA of 56,541.90 further weakened the structure. Volume stood at 185.91 million, reflecting meaningful participation during the decline and strengthening the bearish signal.
The RSI declined sharply to 35.90 and remained below its average of 48.36, indicating weakening momentum and approaching oversold territory. However, the indicator has not yet fallen below 30, leaving room for further downside before becoming deeply oversold. The MACD remains below its signal line, while both lines are positioned in negative territory. The expanding negative histogram confirms strengthening bearish momentum and provides no immediate reversal signal. The simultaneous deterioration in RSI and MACD supports the prevailing downward bias. Nevertheless, an oversold rebound could emerge if the RSI stabilizes near 30–35 and price forms a bullish reversal candle around an important support zone.
Immediate support is around 56,250–56,000. A decisive close below 56,000 could extend the decline toward 55,500 and 55,000. On the upside, the 100-SMA (56,541.90) represents the first resistance, followed by 57,000 and the strong 57,400–57,520 cluster formed by the 200-, 21-, and 50-SMA. The near-term outlook remains cautious to bearish while the index trades below 56,540. Surging crude oil prices, geopolitical tensions, weak global markets, and a softer rupee may keep financial stocks under pressure. Indian markets also weakened amid rising crude and global risk aversion. A sustained recovery above 57,000 would be required to indicate near-term stabilization.
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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.