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Stock market recap: The Indian equity benchmarks witnessed a significant sell-off on Monday, ending with a sharp cut of approximately 2.6% as intensifying geopolitical tensions in the Middle East rattled investor sentiment.

Nifty 50 plunged 602 points to settle at 22,512.65, while S&P BSE Sensex crashed 1,836 points to finish at 72,696.39. This correction was largely driven by escalating frictions between the U.S. and Iran, pushing Brent crude prices toward $113 per barrel and causing the Indian rupee to hit a record low of 93.96 against the U.S. dollar.

Market breadth was overwhelmingly skewed toward the bears. The advance-decline ratio for the session stood at approximately 1:12, with only 259 stocks advancing against 3,015 stocks declining on the NSE. Sectorally, Nifty Metal and PSU Bank indices were the biggest laggards, both sliding more than 3%, while IT stocks like HCLTech and TCS showed marginal resilience amid the broader rout.

Two stock recommendations by MarketSmith India:

Buy: Power Grid Corporation of India Ltd(current price: ₹302)

Buy: HCL Technologies Ltd (current price: ₹1,358)

Nifty 50 recap

Indian equities witnessed a sharp, broad-based sell-off on 23 March, with benchmark indices closing significantly lower amid pervasive weakness across sectors. Nifty 50 declined 2.60% (down 601.85 points) to settle at 22,512.65, slipping below key short-term support levels, while Sensex mirrored the bearish trend.

Market breadth was decisively negative, with 332 stocks advancing against 3,008 stocks declining, underscoring widespread risk aversion. On the sectoral front, rate-sensitive and cyclical pockets led the fall—Nifty Financial Services, Private Banks, Metals, Realty, and Consumer Durables ended 3–5%. On the other hand, IT showed relative resilience with marginal losses. Selling pressure persisted through the session, indicating a lack of buying support even at lower levels.

The index continues to exhibit a decisive breakdown in price structure, with recent sessions marked by a sharp acceleration in downside momentum and formation of long bearish candles, indicating sustained selling pressure. From a momentum perspective, the RSI has slipped to ~31, hovering near oversold territory, which reflects weakening internal strength without yet showing a meaningful reversal signal.

The absence of positive divergence suggests that downside momentum remains intact. Meanwhile, the MACD is firmly in negative territory with a widening gap between the MACD and signal line, accompanied by expanding negative histogram, highlighting strengthening bearish momentum.

According to O’Neil’s methodology of market direction, the Indian equity market has transitioned to a “Downtrend” from a “Rally Attempt,” indicating an early stage of potential trend stabilization following a period of sustained weakness.

Nifty continues to exhibit elevated volatility, reflecting fragile market sentiment and persistent near-term uncertainty. A decisive breakdown below 23,000–22,900 has weakened the overall technical structure, increasing the likelihood of an accelerated decline toward 22,000–21,900 in the near term.

The price action suggests ongoing distribution, reinforcing the prevailing negative bias. On the upside, 23,000–23,400 is expected to act as an immediate hurdle, with any recovery likely to encounter selling pressure in this zone, thereby limiting sharp upside moves in the current environment.

Nifty Bank Performance

Nifty Bank opened with a gap-down and remained in negative territory throughout the session, reflecting sustained selling pressure. It formed a third consecutive bearish candle on the daily chart, reinforcing a negative bias. Although the index attempted a mild recovery during the day, it failed to sustain momentum as selling intensified at higher levels.

The index opened at 52,576.10, hit an intraday high of 52,665.30, declined to a low of 51,323.60, and closed at 51,437.75, down 3.72%. The price action indicates persistent bearish sentiment, with sellers firmly in control. The formation of a long bearish candle near recent lows suggests continuation of the ongoing downtrend and weak buying interest.

On the indicator front, the RSI is around 23.51, deep in the oversold zone, highlighting extreme weakness while also hinting at the possibility of a short-term pullback. However, oversold conditions alone are not sufficient to confirm a reversal in a strong downtrend.

The MACD remains in negative territory with widening divergence, indicating increasing bearish momentum and downward pressure. Both indicators are aligned with the broader trend, suggesting that any bounce could be short-lived unless supported by strong price action. Momentum indicators favor the bears, and no positive divergence is visible yet.

Immediate support is seen near 51,300, followed by a crucial psychological zone around 50,900–51,000. A breakdown below this could accelerate the fall toward 50,000. On the upside, resistance is placed at 52,600–53,000, and stronger resistance near 54,500, where the previous breakdown occurred. Given the current macro uncertainty, elevated global volatility, and persistent selling in financials, the index is likely to remain under pressure. Any pullback towards resistance zones may attract fresh selling, while sustained consolidation near lows is required before a meaningful recovery can emerge.

MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O'Neil. You can access a 10-day free trial by registering on its website.

Trade name: William O’Neil India Pvt. Ltd.

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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.

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