IT is the worst performing sector on signs of slowdown in US and prospect of no rate cuts from US Fed on rising inflation expectations due to trade war; In the last week, the benchmark indices witnessed a sharp correction, with the Nifty ends nearly 3 percent lower while the Sensex was down over 2000 points
FinTech BizNews Service
Mumbai, February 28, 2025: According to Satish Chandra Aluri, Lemonn Markets Desk, Benchmark indices ended sharply lower on Friday on rising trade war worries after Trump announced fresh tariffs on China. Nifty posted worst monthly sliding streak of 5 months, longest since 1996. Broader Mid and Small caps continued to fall with sharp losses again on Friday as valuations continued to derate.
After opening sharply lower following overnight sell off in Wall Street, markets extended the declines throughout the session as bearish sentiment gripped the markets. IT is the worst performing sector on signs of slowdown in US and prospect of no rate cuts from US Fed on rising inflation expectations due to trade war. We are close to the signs of market capitulation with today’s losses and might see a relief rally next week from oversold conditions but overall market is expected to be volatile with downward bias in the near term.
Adds Satish Chandra Aluri, Technically, Nifty 50 is close to the key level of 22000 on the downside. Continuous slide lower has brought the RSI below 30 indicating oversold conditions which might lead to a rebound in coming sessions. Bank Nifty also posted sharp losses with next support around 48200 levels. Markets await key Q3 GDP estimate later today which might show a rebound from previous quarter.
According to Amol Athawale, VP-Technical Research, Kotak Securities. In the last week, the benchmark indices witnessed a sharp correction, with the Nifty ends nearly 3 percent lower while the Sensex was down over 2000 points. Among sectors, all the major sectoral indices registered profit booking at higher levels, with the Capital Market and IT indices correcting sharply. The Capital Market index was down by 9.28 percent, while the IT index declined by 7.90 percent. During the week, the market slipped below 22,500/74500, and post-breakdown selling pressure intensified. Technically, it has formed a bearish candle on weekly charts and is holding a lower top formation on daily and intraday charts, which is largely negative.
We view the current market condition as weak but oversold, hence the strong possibility of a pullback rally from the current levels is not ruled out. For short-term traders, 22,200/73500 would be the key level to watch out. Below this, the market could slip to 22,000-21,800/73000-72500. On the flip side, if the index sustain above 22,200/73500, sentiment could change. Above 22,200/73500, we may see a quick pullback rally up to 22300/74000, with further upside potential that could lift the market up to 22500/74500.
For Bank Nifty, as long as it is trading below 48,500, weak sentiment is likely to continue on the downside, with immediate support zones at 48,000 and 47,500 However, if it moves above 48,500, it could bounce back to 49,250-49,500 or the 50-day SMA (Simple Moving Average).
