Mumbai: The Bombay Stock Exchange (BSE) benchmark index, Sensex, has plunged 3 per cent—a sharp decline of nearly 2,500 points over the last four trading sessions. Its counterpart, the National Stock Exchange (NSE) Nifty 50, has fallen by 2.8 per cent, shedding 679 points to reach 23,496, raising concerns among investors.
Among the Nifty 50 constituents, ITC emerged as the top loser due to price adjustments following the demerger of its hotel business. Other major decliners included Trent, BPCL, HDFC Bank, Adani Ports, Kotak Mahindra Bank, TCS, and Tata Steel. However, ONGC, SBI Life, Tata Motors, and Titan bucked the trend, showing resilience and outperforming the market during the slide.
The Nifty 50 is once again testing its crucial 50-week moving average (WMA) support at 23,661, a level it has hovered around since November 2024. Historically, the index has managed to close above this support on a weekly basis, with the last breach occurring in April 2023.
On wednesday, the Sensex briefly dropped to 77,487 before recovering slightly to 77,600 during midday trade, down 0.8 per cent. Meanwhile, the Nifty traded near 23,535, marking a similar 0.8 per cent decline. Market watchers are now speculating whether the Nifty will rebound to close above its 50-WMA support by the end of the week or finally break below this critical threshold.
Key Levels to Watch
The Nifty is also testing its 200-day simple moving average (SMA) at 23,923, which is expected to act as a major resistance in the near term. A sustained break above this level could pave the way for a recovery towards 24,500, with interim resistance at 24,090 and 24,400. Conversely, if the index breaches the 50-WMA, it may slide further to test its monthly moving average (20-MMA) at 22,275, with intermediate support at 23,085 and 22,520.
The BSE Sensex is currently trading at 77,600, signaling a cautious outlook for the remainder of the week. The index has given a sell signal on the weekly Fibonacci scale, suggesting a subdued trend unless it surpasses 78,585 levels.
Key Levels to Watch
The near-term resistance for the Sensex is projected at 77,865 and 78,190, with further gains possible only if the index breaches the critical resistance at 78,585. A sustained break above this level could trigger a rally, pushing the Sensex towards 79,900.
On the downside, the index is likely to face intermediate support at 77,000, 76,300, and 75,760. However, a deeper slide to 75,200 remains a possibility during January if bearish momentum persists.
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