The Indian equity markets have corrected over 14% from their all-time highs. As the Hormuz crisis and the growing tension across West Asia entered their fourth week, it was mayhem across global markets on Monday. The Nifty 50 corrected a whopping 600 points to below 22,600 levels. Experts predict that it could potentially breach 22,000 in another two sessions if the Index slides below 22,350.
Nifty key levels to watch now
Anand James, who is the Chief Market Strategist at Geojit Investments, said that a direct rise above 22,690 could also invite short-covering rallies. With 22,225 and 22,690 appearing as the immediate trading range, expect swings on either side of 22,560.
“While 22,000 becomes increasingly possible in a day or two, an approach to 22,225 today could see bearish exhaustion allowing recovery swings,” he added.
Another market commentator, Ajit Mishra, Senior Vice President of Research at Religare Broking, said that if Nifty breaches 22,000, it may see 21,700 as its next stop, which is the April 2025 low. However, for now, key support rests at 22,000 with immediate support at 22,350. The 22,850-23,000 zone would act as an immediate hurdle.
Reiterating the same point, Mishra’s point, Vipin Kumar, Assistant Vice President of Research at Globe Capital, said that the index is approaching a crucial support zone placed at 22,000–21,750 levels, citing the same conflict of West Asia. Also, the price support at 21,750 coincides with its 4-year Exponential Moving Average (EMA).
“On short-term charts, the Nifty index has reached oversold territory; hence, the possibility of a bounce-back cannot be ruled out at this juncture, which might lead it towards 22,800–23,000 levels.
Nifty selloff part of global risk-off sentiment
A weekly close below 21,750 levels will trigger a medium-term breakdown that could drag it further lower towards 21,000–20,450 and lower levels, added Kumar of Globe Capital. Any de-escalation in the West Asia conflict is essential for a sustainable up-move.
Moving further, it is important to understand that the huge risk-off globally has impacted all assets, including stocks, bonds and precious metals like gold and silver. In fact, the crash in the safe-haven gold is worse than in equities, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
Conclusion
Most experts advise a wait-and-watch approach as the situation continues to be dynamic. The global sentiment is currently closely linked to the development across the Strait of Hormuz.