D-Street Ahead: How will the Indian stock market move next week? Key technical levels for Nifty, Sensex | Stock Market News

D-Street Ahead: Domestic equity benchmarks Sensex and Nifty 50 extended their losing streak for the fourth straight day to record weekly losses, dragged by auto, banking, and pharma stocks on uncertainty over the impact of US trade policy, weaker rupee against dollar and relentless foreign fund outflows. The frontline indices ended at their lowest since early June on February 21, 2025.

The 30-share BSE benchmark Sensex dropped 424.90 points or 0.56 per cent to settle at 75,311.06. During the day, it tanked 623.55 points or 0.82 per cent to 75,112.41. The NSE Nifty declined 117.25 points or 0.51 per cent to 22,795.90. Midcap and smallcap stocks rose 1.7 per cent and 1.5 per cent for the week. They fell 7.4 per cent and 9.4 per cent a week ago, their worst since March 2020.

Also Read: NSE index rejig: BPCL and Britannia to exit, Jio Financial, Zomato to enter Nifty 50 effective March 28, 2025

Indian stock market’s performance last week

On the weekly front, the Sensex declined 628.15 points or 0.82 per cent and the Nifty went lower by 133.35 points or 0.58 per cent. In four trading days, the Sensex fell 685.8 points or 0.90 per cent while the Nifty dropped 163.6 points or 0.71 per cent. This is the second consecutive week of losses for the blue-chips with uncertainty over US tariffs denting sentiment, while a persistent moderation in earnings and foreign outflows added to losses.

Pharma stocks have lost 2.1 per cent this week after US President Donald Trump said he intends to impose at least 25 per cent tariffs on the sector. The US accounts for nearly 31 per cent of India’s total pharma exports. IT, which also gets a significant portion of its revenue from the US, slid about two per cent this week. 

Autos dropped 2.6 per cent this week on worries over competition as reports said that India may slash the import duty on electric vehicles to 15 per cent from 110 per cent as Tesla prepares to enter the market. Analysts said that recent decline in the segments provided ground for a temporary pullback. The metal index emerged as the only gainer and jumped 1.23 per cent.

“The domestic market continued to exhibit broad-based weakness, primarily influenced by investor concerns over the hawkish tone of the US Fed minutes, which signalled prolonged higher interest rates that could constrain liquidity in emerging markets (EMs),” said Vinod Nair, Head of Research, Geojit Financial Services.

“Although the market has undergone a healthy correction, the uncertainties surrounding the recovery of corporate earnings and ongoing tariff-related risks continue to cast doubt on valuation levels, particularly in the broader market. India is lagging behind its Asian peers, as FII outflows remain high, with the “sell India, buy China” strategy continuing to yield returns for the time being,” said Nair.

Also Read: RBI MPC Minutes: Inflation moderate in near-term, global trade policies pose risk to growth outlook; 5 key highlights

Sensex, Nifty, and Bank Nifty technical levels to watch

Technically, on both daily and weekly charts, the market is still holding a lower top formation and is trading below the 20-day SMA (Simple Moving Average), which is largely negative. Nifty touched its lowest level since June 2024, closing the in negative territory. It ended below 22,800, signaling weakness in the market. 

“We believe that the larger market texture remains on the weak side; however, we could expect a quick technical pullback rally if it succeeds in holding above 22,950/76,000,” said Amol Athawale, VP-Technical Research, Kotak Securities.

“If it does, it could bounce back to 23,100-23,200/76,500-76,800. On the other hand, if it falls below 22,720/75,100, the correction wave is likely to continue. Below that level, it could slip to 22,500-22,400/74,400-74,100. Near 22,400/74,100, contrarian traders may prefer to take a long bet with a strict stop loss of 22,320/73,800,” added Athawale.

According to Ajit Mishra – SVP, Research, Religare Broking Ltd, a decisive break below 22,700 in Nifty could trigger the next leg of the downtrend, potentially dragging the index to 22,500 and then 22,000. On the upside, a recovery would first face resistance at 23,150 (20-DEMA), and a breakout above this level could extend gains towards the next major hurdle at 23,600 (200-DEMA).

Also Read: NSDL, CDSL launch unified app to streamline financial data: How will it benefit investors to manage portfolios?

“Prices continue to trade below the key 21-day and 55-day EMAs, indicating a bearish trend. Strong selling pressure is expected to persist until Nifty 50 decisively closes above the 23,350 mark. Both the RSI and MACD indicators remain negative, reinforcing the downtrend,” said Puneet Singhania, Director of Master Trust Group.

According to Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Intermediates Ltd, technically, on the daily chart, the Nifty 50 index has formed a small red candle, while on the weekly scale, it has formed a doji candle, indicating uncertainty. 

“Nifty Smallcap 100 and Nifty Midcap 100 indices formed green candles on the weekly chart, indicating strong demand. Despite global market turbulence, Nifty defended the 22,725 support, reinforcing a strong demand zone around 22,700. The 21-Day DSMA at 23,200 remains an immediate hurdle, and a decisive move above this level could trigger fresh bullish momentum,” said Yedve.

According to Rupak De, Senior Technical Analyst at LKP Securities, Nifty fell, giving a bearish flag pattern breakdown on the hourly chart, suggesting a rise in bearishness among market participants. Nifty closed at a multi-day low amid increased bearish sentiment. “The RSI (14) entered a bearish crossover. On the lower end, a correction towards 22,500 looks possible in the short term, while on the higher end, 22,850 might continue to remain a strong resistance,” said De.

Bank Nifty opened with a gap down, witnessed selling pressure, and concluded the session lower at 48,981. According to Hrishikesh Yedve, on the daily chart, the Bank Nifty index formed a red candle, while on the weekly scale, it has formed a small green candle, reflecting indecisiveness. 

Bank Nifty closed in negative territory for the second consecutive week, maintaining a bearish trend as prices continue to trade below the key 100-day and 21-day EMAs. “The MACD has recently formed a red histogram candle, signaling further downside momentum,” said Puneet Singhania.

“The RSI stands at 43.41, trading below the 14-day SMA, reinforcing the bearish outlook. Selling pressure is expected to persist unless the index decisively crosses and closes above the 50,000 mark,” added Singhania.

Also Read: Stock market crash: Why are Sensex, Nifty 50 under pressure for six months? Explained with 5 crucial reasons

D-Street trading strategy for next week

The volatility index, India VIX, cooled off by 1.03 per cent to 14.53, indicating a decline in market volatility. “We reiterate our view to focus on banking and IT, as these sectors have shown relatively higher strength during the correction and will be key in determining the market’s next directional move,” said Ajit Mishra of Religare Broking Ltd.

“Among other sectors, metals and energy indicate further recovery potential, while pharma remains vulnerable to more downside. In the broader market, traders should not read too much into the recent rebound and should use any further recovery to reduce positions while waiting for clear signs of trend reversal,” added Mishra.

According to Puneet Singhania, the preferred strategy in this market environment is to sell on rallies. Prices are likely to test the 22,500 and 22,300 levels in the upcoming sessions, reflecting further downside risk. “On the downside, Bank Nifty may likely test the 48,000 level in the upcoming sessions, with a “sell on rise” strategy remaining favorable for traders,” he added.

“Bank Nifty is consolidating within 48,500-49,650 range, and a breakout on either side will determine the next directional move. Traders should closely watch these levels for potential trading opportunities,” said Hrishikesh Yedve.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.