The Indian stock market staged a smart recovery from lower levels on Thursday, with NIFTY50 closing 46.30 points higher at 23,477.80 after ending lower for three consecutive sessions. According to latest reports, NIFTY50 is currently trading near the crucial support zone of 23,500-23,600, with the index showing resilience after plunging more than 1.5% this week. The broader market continued their outperformance by declining only 0.2% on NIFTY midcap 100 and smallcap 100 on Wednesday, compared to the 0.4% drop in the NIFTY50. The NIFTY micap 100 rose 3.3% and smallcap 100 rose over 13.4% on a YTD basis, while NIFTY50 trades over 9% lower in 2026 on a YTD basis. The daily RSI has gone below the oversold levels of 30, indicating a potential bounce back as the index approaches oversold territory. On the daily chart, the index formed a green candle with a long lower shadow, suggesting that buyers stepped in at lower levels during the closing auction session.
Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, said while the broader structure remains constructive, the current price action lacks strength and calls for patience. As reported by Mint, Patel believes a sustained move back above 24,000 is crucial to reinforce the bullish setup and revive upward momentum. Above this level, 24,350 remains the immediate hurdle, with a sustained breakout above 24,350 potentially significantly strengthening bullish momentum and opening the door for further upward movement. On the hourly charts, the setup continues to remain bearish with NIFTY50 closing below the 20 and 50 EMAs for nearly the entire week. Latest technical analysis shows the Nifty formed a sizable bearish candle with a higher high and higher low, opening higher above 24,000 levels but failing to sustain at higher levels as it reacted sharply lower from the previous breakdown area of 24,025. The daily stochastic has approached oversold territory, with buying demand emerging from the key support area of 23,800–23,600 levels, being the confluence of the previous major gap area and the low of July 2026. Index holding above the key support area of 23,800-23,600 will lead to a pullback towards the 50-day EMA placed around 24,150, with a move above this level potentially opening a pullback towards 24,300–24,350 levels in coming sessions. Kruti Shah, quant analyst at Equirus Securities, said she had recommended a 24,000 straddle to institutional clients for the Nifty derivatives expiry on 29 September, effectively positioning for a sharp move in either direction.
For the recovery to gain momentum, the Nifty needs to sustain above the immediate hurdle of 23,495. The next resistance zone lies between 23,572 and 23,623, which marks the downside gap formed on September 9. A decisive move above this gap zone could improve sentiment and lead to further short covering. On the higher side, the next key resistance level is placed near the 8-day EMA, currently positioned around 23,720. Despite Thursday's recovery, the index continues to trade below its short-term, medium-term and long-term moving averages, keeping the overall technical setup weak. However, the combination of a hammer formation after a steep decline and the 14-period RSI staying below 30, reflecting oversold conditions, suggests that a short-term relief rally cannot be ruled out. Market participants will closely track whether the index manages to hold above key resistance levels to confirm a sustainable recovery.
For Bank Nifty, Patel said a decisive breakout above 58,200 would confirm an upside breakout from the triangle and could trigger fresh momentum. According to Mint reports, on the downside, a break below 57,000 would negate the positive setup and signal further weakness. The technical analysis suggests that Bank Nifty's price action requires careful monitoring of these key levels for directional clarity. Barring the fall on Wednesday, Nifty Bank index broadly remained inside the 57,000-58,000 range, with traders waiting for a breakout on either side of this range to get clarity on the next move. The 57,000-58,000 range continues to act as a crucial pivot zone, with the index maintaining its position within this band as the broader market faces headwinds from global uncertainties.
Brent crude oil futures have risen 11% over the past month through 7 September to $97 per barrel, while the US 10-year Treasury yield has climbed 10 basis points to 4.79%, according to Investing.com. Over the same period, the Nifty has fallen 3.27% to 23,779.15, according to exchange data. The external backdrop has become less favourable for Indian equities as Brent crude has risen 0.5% to $96.8 per barrel as tit-for-tat strikes between the U.S. and Iran on vessels sailing in the Strait of Hormuz and other areas heightened concerns of a prolonged supply disruption from the Middle East. The US closed the previous week on a mixed note as the Dow Jones and the S&P 500 closed near the flat lines, while the NASDAQ 100 closed with little gains. Friday's stronger-than-expected jobs data again boosted fears of a rate hike in the upcoming policy meeting. US non-farm payrolls for August came in at 162,000, well above estimates of around 50,000–56,000, while the July figure was revised higher. The US 10-year Treasury yield climbed to 4.79%, and Fed rate hike odds for the September meeting are now priced at 58–62%. Meanwhile, Asian markets opened the week on a positive note as Japanese and Korean markets witnessed strong buying activity, with the KOSPI soaring 3% and the Japanese Nikkei at 2.4%, though Hong Kong markets opened on a negative note with over 0.4% losses. US equity markets are shut Monday for Labour Day, with the rupee lifting about 0.1% by intervention and last hovering at 94.42 per dollar, compared with its close at 94.4850 in the previous session.
