The Nifty 50 has cracked below its 200-week moving average for the first time since the Covid crash, hitting an intraday low of 22,569 on Tuesday. According to CNBC TV18, the index closed Tuesday's session at 22,716, down 0.28% for the session, after a volatile trading day that saw sellers push the index sharply lower in the first hour before recovering from day's lows. This marks a critical technical juncture as the index fell below the crucial 22,600 level that technical analysts had flagged as a key support zone. Rupak De, Senior Technical Analyst at LKP Securities, confirmed this is the first time since the Covid crash that Nifty has fallen to the 200-week moving average. The index started Tuesday's session with another gap-down opening, with sellers pushing the index sharply lower in the first hour of trade, before a recovery helped recoup significant portion of early losses. A decisive break below this level could trigger a sharper correction in the market, while if Nifty manages to hold above 22,600, a recovery towards higher levels can still be expected.
The Nifty 50 closed Tuesday's session at 22,716, remaining below the key psychological 23K mark, while the Sensex slipped to a six-month low amid sustained selling pressure. According to CNBC TV18, the decline also dragged Nifty to its 200-week moving average, currently placed at around 22,600, with the index falling more than 1,600 points, or 6.5%, during the month of September. The index has declined for eight straight weeks, its longest weekly losing run since 2020, with the index down 6.8% from recent levels. The broader market has also weakened, with the Nifty Midcap 100 declining 0.99% and the Nifty Smallcap 100 falling 0.81%, showing that the selloff is not limited to frontline stocks. The move follows Monday's sharp decline when the Nifty closed at 22,780.25 and the Sensex tumbled 1,124 points, wiping out nearly ₹9 lakh crore in investor wealth. Both benchmarks finished at their lowest levels in almost six months, as the pressure on Dalal Street shows no signs of easing.
The Nifty index cracked 1.4% to hit a low of 22,807.55 on Monday, coming within striking distance of its 200-week moving average at 22,600 - a level not seen since June 2020. According to Business Standard, the Nifty last closed below the 200-WMA in the week ended June 25, 2020 - i.e. six years and three months ago. On Tuesday, the Nifty 50 Index fell below its 200-day moving average on a weekly basis for the first time since March 2020, with the 30-stock BSE Sensex breaching the same support level last week. Sudeep Shah, Vice President-Technical & Derivatives Research at SBI Securities, notes that the 200-WMA is one of the most important long-term trend indicators used by market participants to assess the broader direction of the market. Shah emphasizes that historically, the 200-WMA has acted as a strong long-term support zone during major market corrections, with the Nifty tumbling up to 26.8% and 38.3% after breaching its 200-WMA during the 2008-09 Global Financial Crisis and the 2020 Covid-led crash.
According to Rupak De from LKP Securities, the market will watch whether Nifty can reclaim 22,600 on a closing basis, with a failure to do so potentially keeping sentiment weak. As per CNBC TV18, Nagaraj Shetti of HDFC Securities said the underlying trend for Nifty remains weak, expecting any bounce towards the 22,900–23,000 zone to be short-lived and seeing such moves as potential sell-on-rise opportunities. Shetti noted that a break below 22,550 could open the way for further declines towards 22,200 in the near term. Sudeep Shah of SBI Securities said the 22,570–22,550 zone, corresponding to Tuesday's low, could act as immediate support, with a decisive break below this zone potentially triggering fresh selling pressure towards 22,400. On the upside, the 22,900–22,930 zone is likely to act as an immediate hurdle, with a sustained move above this range potentially extending the pullback towards 23,050. The technical setup remains weak, with the Relative Strength Index (RSI) in the mid-20s, indicating deeply oversold conditions, while the Moving Average Convergence Divergence (MACD) remains deeply negative, signalling persistent downside momentum.
Among Nifty constituents, Adani Enterprises and Adani Ports were the top performers, while Titan and Wipro were the biggest laggards. According to CNBC TV18, at the sectoral level, sentiment remained weak, with Nifty IT, Realty and FMCG extending their declines, while Metal and Pharma stocks saw some buying interest. The broader market also remained under pressure, with the Nifty Midcap 100 declining 0.99% and the Nifty Smallcap 100 falling 0.81%. Tech and consumer durables have led the losses so far, while metals and pharma have offered some support to the broader market performance. The pressure points remain strong with elevated crude prices, a weak rupee and sustained foreign selling keeping sentiment under stress. Brent crude had risen towards $108 a barrel before easing to around $105, while the rupee is trading near two-month lows around 96.2 to the dollar. Bond yields have also added to the pressure, with India's 10-year government bond yield climbing to 7.17%, its highest level since April 2024, while global yields are elevated with the US 10-year Treasury yield around 5.2% and the UK 10-year yield near 5.4%.
The banking index faced even stronger selling pressure on Monday, underperforming the frontline indices by declining nearly 2% and forming a sizeable bearish candle on the daily chart. According to NDTV Profit, Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, said Bank Nifty also breached its crucial 55,000 support level, indicating an acceleration in selling pressure and weakening market structure. Momentum indicators have also weakened, with the daily Relative Strength Index (RSI) slipping to 30.22, its lowest reading since April 2026. On Tuesday, Bank Nifty closed at 54,471.65, down 1,108.75 points or 1.99%, after breaking below the key 55,000 level. According to Shah, the 55,000-55,100 zone is now likely to act as an immediate resistance area. In this scenario, Bank Nifty could move towards 53,900, followed by the 53,400 level in the short term.
