Analysts warn that unless Nifty reclaims 24,800, the bearish tone will persist, with risks of a slide toward 24,300. Expiry-driven short covering remains the only near-term support.
Indian equity markets have seen a choppy session on Monday ahead of the weekly expiry on Tuesday and the Reserve Bank of India’s rate decision on October 1. Barring media and consumer durables, all sectors traded in the green at 2 pm.
Market Outlook
SEBI-registered analyst Varunkumar Patel noted that foreign investors have been aggressive sellers, offloading over ₹5,800 crore in cash while simultaneously building net index shorts in F&O. This dual move (cash selling + derivative shorts) signals that FIIs are not just booking profits but actively betting on further downside.
He added that while global markets are facing some negativity (rate-cut doubts, geopolitical jitters), the intensity is sharper in India. The underperformance suggests local concerns (valuations, political noise, H1B/sectoral headwinds) are adding extra weight. This divergence shows that foreign flows are disproportionately targeting Indian equities.
On the technicals, he said that Nifty’s chart structure looks decisively weak with consistent lower highs and broken supports. Momentum oscillators are in bearish zones, volumes are skewing toward down-days, and index breadth is poor. The overall market tone suggests that any bounce will be short-lived unless fresh triggers emerge.
Patel identified Immediate supports around 24,500–24,450, but the real risk is a breakdown toward 24,300 this week if sentiment does not improve. On the upside, 24,800–24,850 remains the first hurdle, and unless this level is reclaimed, the bias remains bearish. The Bank Nifty is also showing parallel weakness, adding to the downside pressure on the Nifty.
He recommended caution and advised traders to focus on quality large caps with relative strength, and avoid bottom fishing in weak mid caps and small caps. Patel concluded that short trades could be considered on failed pullbacks near resistance levels.
All Eyes On Expiry
Bharat Sharma of Stockace Financial Services said that a strong technical pullback from the current levels is essential at this moment. The upcoming expiry is likely to see short covering as the most probable outcome, or downside pressure could intensify below the 200-day exponential moving average (DEMA) support.
Sharma added that a breach below this support may push the Nifty towards a 100% retracement level near approximately 24,400, beyond which the market could become very uncertain. On the other hand, in case of a recovery, there will be opportunities to sell on any rise.
Crucial Levels To Watch
Financial Sarthis flagged 24,600 as the key level to watch for Nifty on a daily closing basis. In a bearish scenario, if the index closed below 24,600, further downside is expected. In a bullish scenario, if it holds above 24,600, they anticipate a potential upside move ahead.
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