Nifty 50, Sensex and the Nifty Bank index fell sharply last week. Sensex and Nifty were down about 2.6 per cent each. Nifty Bank index fell 1.9 per cent. We had expected the benchmark indices to reverse higher after testing their key support. That view has gone wrong. The short-term picture is weak. However, there is no major change in the long-term outlook. The fall last week is just delaying the rally that we have been expecting.
The US increasing the H-1B visa fee coupled with strong foreign money outflow weighed on the markets last week. The Foreign Portfolio Investors (FPIs) pulled out about $1 billion from the Indian equity segment last week.
Among the sectors, the BSE IT and the BSE Realty indices were beaten down the most. They were down 7.3 per cent and 6.1 per cent respectively.
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Nifty 50 (24,654.70)
Short-term view: The outlook is negative. Immediate support is at 24,500. A bounce from here itself can take the Nifty back up to 25,000-25,200 again. But a break below 24,500 can see an extended fall to 24,250 or 24,100. Thereafter, a reversal to 24,600 initially and 25,000 eventually can happen.
The danger is only if Nifty breaks 24,100 and extends the fall beyond 24,000. If that happens, a steep fall to 23,500 is possible.
Medium-term outlook: The broader bullish view remains intact. Cluster of supports are there in the broad 24,000-23,000 region. Intermediate resistance is around 27,000. Nifty can target 28,000-29,000 over the medium term and 31,000 in the long term.
The bullish view will go wrong only if the Nifty declines below 23,000. In that case, 22,000-21,500 can be seen on the downside.
Nifty Bank (54,389.35)
Short-term view: An important support is around 54,100-54,000. If the index manages to bounce back from this support zone, it will give some relief. Such a bounce can take the Nifty Bank index up to 55,000 and 55,600 in the short term.
But a break below 54,000 will increase the selling pressure. In that case, an extended fall to 53,500 or 52,900 is possible going forward. So, the price action around 54,000 will need a close watch this week.
Medium-term view: Crucial supports are at 53,500 and then in the 53,000-52,800 region. As long as the index sustains above these supports, the broader bullish view will remain intact. As such, there is no change in the bullish view of seeing a rally to 58,000-59,000 in the medium term and 61,000 in the long term.
Nifty Bank index has to decline below 52,800 to negate our bullish view. If that happens, a fall to 52,000 and lower levels can be seen.
Sensex (80,426.46)
Short-term view: The outlook is negative. Sensex can fall to 79,500 or 79,200. A bounce from either of these two levels will ease the downside pressure. Sensex can then rise back to 80,500 or even 81,300 thereafter.
But a break below 79,200 will trigger an extended fall to 78,800. A fall beyond 78,800 is less likely.
Medium-term view: Strong support is around 77,000. The broader bullish view will remain intact as long as the Sensex stays above it. As such, we retain our bullish view of the Sensex targeting 88,000-89,000 in the medium term and 91,000-92,000 in the long term.
The bullish view will go wrong only if Sensex declines below 77,000. That will increase the danger of a sharp fall to 72,000 and lower.
Nifty Midcap 150 (20,967.75)
The support at 21,700 was broken contrary to our expectation. The Nifty Midcap 150 index fell sharply over 4 per cent last week. The near-term picture is weak.
The index can fall further to 20,500. A bounce thereafter can give some relief. It can then take the index back up to 21,350 and even 21,700. That in turn will keep alive the chances of an inverted head and shoulder formation on the chart.
In case the index breaks below 20,500, an extended fall to 20,100-20,000 is possible. However, the long-term bullish view will remain intact as long as the index stays above 20,000. The rally to 23,000-23,500 (medium-term) and 25,000-25,500 (long-term) that we have been mentioning will go wrong only if the index declines below 20,000.
Nifty Smallcap 250 (16,683.10)
The index tumbled over 7 per cent last week breaking below the support at 17,100. A crucial support is at 16,450. Failure to bounce back from there can drag the Nifty Smallcap 250 index down to 15,100 or even 16,750 in the short term.
Such a fall will bring our long-term bullish view under threat. So, the price action this week is going to be very crucial. The Nifty Smallcap 250 must sustain above 16,450 to keep alive our overall bullish view of seeing 20,000 (medium-term) and 21,500-22,000 (long-term) on the upside.
Published on September 27, 2025