The Indian stock market experienced a downturn on August 2, snapping a five-day winning streak as benchmark indices closed lower. The Sensex declined by 885 points, or 1.1 percent, settling at 80,982, while the Nifty dropped by 293 points, or 1.2 percent, to end at 24,717. This decline marked a significant pullback from recent highs, with the Nifty falling below the 24,750 mark.
Market performance on Friday was mixed, with 1,426 shares advancing, 1,960 shares declining, and 83 shares remaining unchanged. The day’s trading formed a negative candle on the daily chart for the Nifty, signaling a potential short-term top reversal pattern at the new high of 25,078.
Technical Analysis and Market Outlook
Nagaraj Shetti of HDFC Securities noted that while the short-term trend of the Nifty is down, the broader market’s near-term uptrend remains intact. Shetti suggests that the market may experience further weakness, potentially dropping to the 24,600-24,500 levels before any significant bounce back. The immediate resistance level for the Nifty is pegged at 24,900.
Weekly Market Summary
The decline on Friday led to the market snapping an eight-week gaining streak. Both the Sensex and Nifty saw minor cuts, each down by 0.3 percent for the week. In contrast, broader markets displayed resilience, with the Midcap Index and Nifty Bank showing gains of 0.3-0.5 percent. Notably, 60 percent of Nifty stocks ended the week with negative returns, reflecting a broad-based sell-off.
Commodity Market Update
Oil prices remained steady on Friday but were poised for a fourth consecutive weekly decline due to weak global fuel demand, which overshadowed concerns about potential supply disruptions in the Middle East. Brent crude futures edged up by 18 cents, or 0.2 percent, to $79.70 per barrel, while U.S. West Texas Intermediate crude futures increased by 16 cents, or 0.2 percent, to $76.47 per barrel.
Top Gainers and Losers
Among the top gainers on Friday were:
- Zomato: +12.1%
- Adani Wilmar: +9.99%
- Philips Carbon: +8.67%
- J&K Bank: +6.81%
- PayTM: +6.07%
The biggest losers included:
- Cummins India: -7.98%
- Escorts: -5.9%
- Birlasoft: -5.86%
- Emami: -5.45%
- Capri Global: -5.11%
Market Implications
The recent market performance indicates a consolidation phase, with investors possibly booking profits after a prolonged rally. The formation of a short-term top reversal pattern suggests caution, as further declines may be on the horizon. However, the broader uptrend remains intact, providing some optimism for a potential recovery.
Investors are advised to keep an eye on key support and resistance levels, as well as global economic indicators, which could influence market movements in the coming sessions. Despite the recent dip, the overall sentiment in the market remains cautiously optimistic, with opportunities for selective buying on dips.
