The bearish momentum is likely to persist as long as the NSE Nifty 50 remains below 22,500, but a strong possibility of a pullback rally from the current levels is not ruled out, according to analysts.

The Nifty recorded its longest monthly losing streak in 28 years, falling for the fifth consecutive month, a trend not seen since November 1996.

Technically, the index breached the 22,500 support with a gap-down opening and formed a bearish Marubozu candle, indicating weakness, according to Hrishikesh Yedve, research analyst at Asit C Mehta Investment Interrmediates Ltd.

“As long as the Nifty remains below 22,500, the bearish momentum is likely to persist, with 22,000 acting as an immediate support, followed by 21,850, where the 100-week simple moving average is placed,” Yedve said.

“We view the current market condition as weak but oversold,” Amol Athawale, vice president of technical research at Kotak Securities, said. “Hence, the strong possibility of a pullback rally from the current levels is not ruled out.”

For short-term traders, 22,200 will be the key level to watch. Below this, the market can slip to 22,000–21,800, according to Athawale.

“On the flip side, if the index sustains above 22,200, the sentiment could change. Above 22,200, we may see a quick pullback rally up to 22,300, with further upside potential that could lift the market up to 22,500,” Athawale said.

The Bank Nifty, which settled lower at 48,345, formed a red candle on the daily chart technically, reflecting weakness, according to Yedve. “On the downside, Bank Nifty will find strong support around 47,840, while on the upside, 49,000 will remain a challenging barrier for the index.”

Market Recap

The benchmark indices ended the week and the month with heavy losses on Friday, with the NSE Nifty 50 falling to the lowest level since June 5.

The NSE Nifty 50 ended 420.35 points or 1.86% lower at 22,124.70, while the BSE Sensex closed 1,414.33 points or 1.9% down at 73,198.10. During the day, the Nifty fell as much as 1.95% to 22,104.85, while the Sensex dropped 1.97% to 73,141.27.

In February, over 450 of the Nifty 500 stocks experienced declines, marking a challenging month for the market.

FII/DII Activity

Foreign portfolio investors continued to remain net sellers of Indian equities for the seventh straight session on Friday, while domestic institutional investors stayed net buyers for the 17th straight session.

The FPIs offloaded stocks worth Rs 11,639 crore — the highest-ever selloff since Nov. 28, 2024. The DIIs mopped up equities worth Rs 12,308.6 crore, according to provisional data from the National Stock Exchange.

F&O Action

The Nifty March futures were down 1.81% to 22,280.05 at a premium of 155.35 points, with the open interest up 6.86%.

The open interest distribution for the Nifty 50 March 6 expiry series indicated most activity at 22,500 call strikes, and the 20,800 put strikes having the maximum open interest.

Major Stocks In News

  • Piramal Enterprises: The company has received GST demand of Rs 1,502 crore, including interest and penalty from Maharashtra tax authority.

  • Tech Mahindra: The company’s board has approved the merger of Comviva Technologies USA, Inc. with its parent company viz. Comviva Technologies Americas Inc., wholly owned subsidiary of Comviva Technologies Ltd., India, and step-down subsidiaries of the company.

  • UltraTech Cement: The company aims for an internal rate of return of approximately 25% and a return on capital employed exceeding 20% in its cables and wires business.

Global Cues 

Stocks in the Asia-Pacific region opened higher on Monday, shrugging off concerns about tariffs on Canada, Mexico and China while European leaders pledged support for Ukraine.

Japan’s Nikkei rose 0.71%, or 276 points, to 37,423, while Australia’s S&P ASX 200 was up 0.17% at 8,186 as of 6:28 a.m. Future contracts in China and Hong Kong hinted at a negative start.

Stocks in China will face a renewed test as top officials will meet to discuss economic priorities, with hopes running high for further stimulus. The yuan has gained by 0.6% this year while a gauge of the nation’s equities has jumped more than 12%, according to Bloomberg.

The euro gained on Monday along with Eastern European currencies after their leaders pledged to increase defence spending amid concerns of a US pullback.

The largest cryptocurrency held onto its Sunday rally after President Donald Trump talked up his plan for a strategic crypto reserve. Bitcoin has fallen over 20% from its peak.

Stocks on Wall Street ended the volatile session higher while treasuries extended February’s rally. The S&P 500 rose 1.59% while the Nasdaq 100 advanced 1.63%. The Dow Jones Industrial Average rose by 1.39% on Friday.

The dollar index — which tracks the greenback’s performance against a basket of 10 leading global currencies — was 0.3% down at 107.28. The benchmark yield fell two basis points to 4.24%.

US Federal Reserve Chair Jerome Powell’s speech, European Central Bank’s interest rate decision, and US Manufacturing PMI will be the key focus in the coming week.

Currency Market

The rupee closed sharply lower against the greenback as demand for the safe-haven unit persisted in the wake of tariff outlook uncertainty. The rupee closed 32 paise weaker at 87.52 against US dollar on Friday.

The Indian currency had opened 12 paise weaker at 87.32 against US dollar. During the last leg of the trade, the Indian unit slumped 35 paise to 87.55 against the US dollar.

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