Indian equity markets opened on a weak note with Nifty 50 declining 172.45 points or 0.71% to 24,003.65 and Sensex falling 472.79 points or 0.61% to 76,796.62 as of 11:25 IST. The cautious sentiment persists ahead of MSCI's quarterly index changes being implemented at Monday's close and taking effect on September 1, along with escalating Iran war tensions following US forces striking two Iranian launchers. Brent crude futures jumped $2.14 or 2.43% to $90.24 per barrel for November 2026 settlement, while Asian markets were down 0.7%, reflecting the global risk-off sentiment. Market breadth remained negative with 2,535 shares falling against 1,527 rising on the BSE, indicating broad-based selling pressure across sectors.
MSCI's quarterly index changes will be implemented at Monday's close and take effect on September 1, marking the first MSCI rebalancing under India's new closing auction system. As part of its August review, the index provider added four Indian stocks to its widely tracked Global Standard index and removed three. According to The Hindu BusinessLine, this rebalancing under the new closing auction system, which has led to sharp swings in benchmark indexes, especially on monthly derivatives expiry days, could result in outsized moves in affected stocks and the broader index during the final half-hour of trading. Hariselvan Radhakrishnan, founder and CEO of HST Wealth, noted that with passive fund flows executed around the closing auction, the final half-hour could see significant moves in affected stocks and the broader index, potentially making the closing print less representative of underlying market sentiment.
According to Bajaj Broking Research, the Nifty formed a small bearish candle on the daily chart with a long lower shadow, indicating corrective consolidation while buying interest was visible around the 24,000 level. The index tested the 24,000 mark during Monday's session, with a decisive break below this level potentially increasing selling pressure and pushing the Nifty towards the next support zone near 23,800. On the upside, the 50-day EMA near 24,190 is expected to act as an important hurdle, with a sustained move above this level opening the way for a pullback towards 24,300-24,350 in coming sessions. The brokerage has identified 24,000-23,800 as the key support zone, supported by the confluence of the previous major gap area and the 61.8% retracement of the previous upward move from 23,606 to 24,774.
The Nifty Media index declined 3.70% to 13,216.40, reversing from its previous session's 0.39% gain. Major media stocks witnessed significant declines with Zee Entertainment Enterprises down 9.66%, Network 18 Media & Investments falling 4.65%, Sun TV Network declining 2.42%, Saregama India down 2.14%, and Prime Focus dropping 2.09%. Among other losers, Nazara Technologies declined 1.8%, Hathway Cable & Datacom fell 1.61%, PVR Inox dropped 1.38%, DB Corp declined 1.05%, and Tips Music fell 0.88%. This sharp reversal in media stocks reflects the broader market volatility and investor caution ahead of the MSCI rebalancing.
Bank Nifty showed relatively better buying interest on Monday, forming a bullish candle with a lower low and a higher high, indicating demand around the 50-day EMA. According to Bajaj Broking Research, the broader nine-week consolidation range remains intact between 56,500 and 58,700, with a breakout above or breakdown below this range providing clearer directional signals. The index is facing resistance around 58,000 levels, with sustaining above 58,000 opening upside towards 58,500-58.700 levels. In the shorter timeframe, Bank Nifty has been consolidating within a narrow range for the past 19 sessions, having retraced only around 50% of its previous seven-session rise from 56,023 to 58,248, suggesting a higher base may be forming. The 56,500 level remains an important short-term support for Bank Nifty, coinciding with the 52-week EMA and the lower boundary of the nine-week consolidation range.
