Indian equities ended sharply lower on Thursday as expiry-day volatility intensified after the first monthly expiry under the Closing Auction Session. The Sensex fell 539 points or 0.7% to close at 76,934, while the Nifty 50 lost 117 points or 0.48% to end below 24,091. Both benchmark indices erased all morning gains, with the Nifty closing near its day's low after forming a sizeable bearish candle. According to latest reports, the index slipped below its 8-day exponential moving average during the closing auction session but managed to hold its 50-day moving average support before the session's end.
Thursday's session saw the Nifty erase previous session gains and form a bearish candle, with the index now trading about 0.78% below its 20-day moving average. The index has closed decisively below its 50-DMA and continues to witness elevated volumes over the last 11 trading sessions, leading to the formation of a distribution day. Technical analysts note that the Nifty 50 has slipped below the rising channel on the daily timeframe, indicating an increase in bearishness in the market. Rupak De from LKP Securities reports that the index has fallen below the 50EMA, confirming a weakening trend, with the daily RSI also breaking below its rising trendline. Further weakness could emerge in the near term, potentially dragging the Nifty towards 23,900 and lower, while resistance is placed at 24,200 and 24,350.
Despite the weakness in the benchmark, the Nifty Smallcap 100 outperformed and touched a fresh all-time high during the session. The market saw investors move away from IT and FMCG stocks towards metals, banking and financial services sectors. This sector rotation reflects changing investor sentiment and risk appetite, with smaller companies attracting more attention than large-cap stocks in the current market environment. Among the stocks that witnessed strong buying interest were Bombay Burmah, Whirlpool India, NMDC Steel, Apar Industries, BHEL, Welspun Corp and Wockhardt, while several stocks including Welspun Corp, HFCL, Global Health, Jindal Saw, Solar Industries, Laurus Labs and Sai Life Science hit their 52-week highs on NSE.
The Nifty remains in a sideways trend within the 24,000-24,400 range, with immediate support at 24,115 corresponding to Tuesday's low. A break below that level could push the index towards the 24,000-24,040 support zone. On the upside, the index needs to reclaim and hold above 24,400 to confirm a breakout, with a sustained move above that level potentially opening the way towards 24,550-24,670 in the near term. For the short-term trend to improve, the Nifty needs to reclaim and sustain above the 20-DMA near 24,385. However, with the index breaking below the rising channel and 50EMA, these levels are now under review and may require adjustment based on continued market performance.
Market breadth showed mixed signals with 1,341 stocks witnessing advances, 2,160 seeing declines while 118 stocks remained unchanged out of 3,619 stocks that traded on NSE on August 27. Among the most active stocks in value terms were HDFC Bank (₹3,328 crore), Bombay Burmah (₹2,306 crore), ICICI Bank (₹1,667 crore), Bharti Airtel (₹1,655 crore), Adani Power (₹1,488 crore), ICICI Prudential AMC (₹1,475 crore), and Reliance Industries (₹1,455 crore). Stocks that witnessed significant selling pressure included Ramco Cements, Manappuram Finance, CONCOR, Capri Global, ICICI Prudential AMC, Sapphire Foods and Concord Biotech, while RVNL, HDFC Bank, Groww, Inox Wind, Aditya Birla Retail, Dabur India and IRFC hit their 52-week lows on NSE.
