Sensex Down 345 Points, Nifty at 25,355; Nifty Prediction for Tomorrow

Markets End Lower: Support Breached – Key Levels to Watch on July 11

The Indian equity markets ended Thursday’s session with sharp declines across major indices, as bearish sentiment took firm control during the weekly expiry.

The Nifty 50, which had been finding strong support at the 25,400 level over the past few sessions, decisively broke below that mark, signaling increased vulnerability to further downside in the near term.

With weakness spreading across sectors and market breadth remaining negative, all eyes now turn to earnings triggers and key support zones.

Market Recap: Benchmarks Close Deep in the Red

Thursday’s session was marked by sustained selling pressure, resulting in notable declines across both benchmark and broader indices.

The selling intensified in the second half of the session, with weak global cues and lack of fresh domestic triggers weighing on sentiment.

• The Nifty 50 lost 121 points, or 0.47%, to close at 25,355.25
• The BSE Sensex dropped 346 points, settling at 83,190.20
• The Nifty Bank index fell by 258 points to end at 56,956
• The Nifty Midcap 100 and Smallcap 100 indices also closed lower, though they showed relative resilience, with the midcap index down 180 points at 59,160

The market breadth was decisively negative, reflecting broad-based selling. Out of the 50 Nifty stocks, 40 ended in the red, while 22 of the 30 Sensex components closed lower. The Nifty Bank index saw 10 out of 12 constituents post losses, indicating deep pressure on financials.

Sectoral Snapshot: Only Realty and Metal Shine

The sell-off spared few sectors. Most sectoral indices ended in the red, with the exception of realty and metal, which managed to buck the trend and close in positive territory.

• IT, PSU banking, pharma, and FMCG stocks led the losses.
• Private banking, auto, and financial services also witnessed moderate declines.
• Real estate stocks continued their positive momentum, supported by strong project launches and upbeat demand sentiment.
• Metal stocks were lifted by strength in global commodity prices and expectations of a demand revival from China.

The weakness in IT and PSU banks was particularly noteworthy, given the sharp corrections seen in heavyweight stocks in these sectors.

Concerns around earnings growth, global tech spending, and rising bond yields continued to hurt IT valuations.

Technical Outlook: Breakdown Below Support Signals More Downside

The breach of the 25,400 level on the Nifty is being viewed by technical analysts as a significant development.

According to Rupak Dey, Senior Technical Analyst at LKP Securities, Nifty witnessed a clear breakdown from the congestion zone on the daily chart, reinforcing the short-term bearish setup.

He noted that the index has also slipped below the 21-hour exponential moving average (EMA), indicating weakening momentum.

Additionally, the Relative Strength Index (RSI-14) has turned negative on the daily timeframe, further confirming bearish momentum.

“In the near term, the trend is likely to remain weak,” Dey said. “If the index fails to recover quickly, we may see further correction towards the 25,250–25,200 support zone. On the upside, resistance is now visible at 25,400, followed by 25,500.”

This shift below key moving averages and breakdown from a sideways range suggests that the market may take time to stabilize, unless strong positive triggers emerge.

Investor Sentiment: Bears Take Control Amid Uncertainty

Aditya Gaggar, Director at Progressive Shares, commented that Thursday’s session was dominated by bearish sentiment.

“After a sluggish opening, the market entered a one-way downward trajectory and closed near the day’s low. IT and PSU banks were the worst-hit sectors,” he said.

He pointed out that midcap and smallcap indices, while also closing in the red, performed relatively better than frontline indices.

“This divergence suggests that while profit-booking is underway, investor interest in broader markets remains intact, possibly due to hopes of better earnings growth in select pockets,” he added.

Gaggar also emphasized that the breakdown below the 25,400 mark is significant from a sentiment standpoint.

“If the bearish momentum persists, Nifty could slip to the next key support near 25,200. However, a recovery above 25,520 could open the door for a short-term bounce.”

July 11 Preview: TCS Results in Focus

The next trading session on July 11 will be crucial, as the market is set to react to the Q1 earnings results of TCS, one of India’s largest IT services firms.

According to Ajit Mishra, SVP of Technical Research at Religare Broking, the market’s early direction will be shaped by both the numbers and management commentary from TCS.

He observed that Nifty is currently hovering near its 20-day EMA and the lower boundary of a prior consolidation range between 25,200–25,300, which makes this zone critically important for the index’s near-term outlook.

“If Nifty holds this support zone, we could see some buying interest emerge. However, given that earnings season is just starting, traders should expect heightened volatility and focus on stock-specific action,” Mishra advised.

He also warned that if the index breaks below 25,200, it could trigger further unwinding and bring 25,000 into play as the next psychological support.

Strategic Takeaways for Traders and Investors

1. Watch Key Support Levels: Nifty has now entered a key support zone (25,200–25,300). A breakdown below this range could lead to sharper declines.
2. Earnings to Drive Volatility: As Q1 results kick off, expect increased stock-specific moves. TCS results will set the tone for IT stocks.
3. Follow Sector Rotation: Realty and metal sectors are showing relative strength, offering potential opportunities even in a weak market.
4. Manage Risk Proactively: With technical indicators turning negative and support zones under pressure, risk management becomes crucial for traders.
5. Be Selective: The broader market is not uniformly weak. Midcap and smallcap resilience suggests selective stock-picking could outperform index-based strategies.

Final Thoughts

The breach of the 25,400 level on the Nifty has opened the door to a deeper correction, especially if upcoming earnings fail to impress.

With sentiment turning cautious and technical indicators flashing warnings, traders should prepare for more volatility.

Key support at 25,200 will now act as the battleground for bulls and bears. As the market enters earnings season, stock-specific opportunities will be critical, and staying nimble will be essential for navigating the next few sessions.