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India
India’s equity markets continue to face pressure, with the Nifty 50 index slipping by more than 1%, or over 200 points, on Monday. This decline caused the index to fall below the crucial 22,800 level, a strong support point over the past eight to ten trading sessions.
The breach of this important technical support level was a major factor contributing to Monday’s market drop. In addition to the Nifty, both the Nifty Midcap and Smallcap indices also saw losses of over 1%.
Another key factor driving the decline was the weak performance from Wall Street on Friday, fueled by concerns over a slowing economy and the Federal Reserve’s stance on not cutting interest rates until inflation returns to the 2% target.
This week, two major events on Wall Street could influence market sentiment: the release of Nvidia Corp.’s earnings and the Personal Consumption Expenditure (PCE) data on Friday, which is the Federal Reserve’s preferred inflation gauge. Indian markets will also be impacted by a shortened trading week due to a holiday on Wednesday for Maha Shivratri.
According to the latest Bank of America fund manager survey, India was ranked as the second least favored Asian market, with China now in third place, after previously being the least favored in January. Meanwhile, the Hang Seng index has outperformed global equities in 2025, surpassing Wall Street in gains.
Valuation concerns also persist. MSCI China is trading at a price-to-earnings (P/E) ratio of 12, despite a 13% rise so far this year, while MSCI Brazil is trading at a P/E of 9, with a 15% gain. On the other hand, MSCI India continues to trade at a relatively high P/E of 24, despite a 5% drop through Friday.
Sameet Chavan from Angel One highlighted that the 22,700-22,400 range is crucial for the Nifty, advising caution against aggressively shorting the market despite increased volatility. Similarly, Nagaraj Shetti from HDFC Securities mentioned that the Nifty’s underlying trend remains uncertain, and a break below 22,700 could quickly drive the index down to the 22,450 level, which is the 20-month Exponential Moving Average. He also noted that any bounce could face resistance around the 23,000-23,100 levels.
Currently, the Nifty is trading down by over 240 points at 22,555.
