The Nifty 50 index has slipped below its 200-day moving average (200-DMA) of 25,345 points amid ongoing tensions in West Asia, with 29 of its 50 constituent stocks currently trading below the key technical level.
Indian equity markets have reflected the impact of the continuing conflict in West Asia, with the Nifty 50 registering a sharp decline over the past two trading sessions. The benchmark index is currently trading nearly 1,000 points below its 200-DMA level of 25,345 points. The index breached this critical technical level for the first time last Friday, raising investor concern.
In market practice, the 200-DMA is regarded as a key long-term support indicator. When a major index trades below this level, it is widely viewed as a signal of weakness. This has prompted questions in the market about whether the current decline signals further selling pressure or a potential buying opportunity.
Experts identify 24,000 as a key support level
According to market experts, the 24,000 level currently represents an important psychological support level for the Nifty. U. R. Bhatt, Co-Founder and Director at Alfaanity Fintech, said that further downside in the market cannot be ruled out if conditions deteriorate. However, he indicated that the probability of an extreme situation such as a nuclear conflict remains low.
Bhatt stated that if oil infrastructure is affected and crude oil prices rise sharply, the Nifty could decline further to the 23,500–23,700 range. This range is considered the next significant short-term support level.
29 of 50 Nifty stocks trading below 200-DMA
Technical data show that 29 out of the 50 constituents of the Nifty 50 are currently trading below their respective 200-DMA levels. This suggests that the decline is not limited to the index level but reflects broader weakness across multiple stocks.
Major companies trading below their 200-DMA include Infosys, Bharti Airtel, ITC, Hindustan Unilever, Bajaj Finance, HDFC Bank, ICICI Bank, Reliance Industries and Eternal. These companies are among the largest stocks in their respective sectors. When such large-cap stocks fall below their 200-DMA levels, market sentiment is generally viewed as weak.
Larsen & Toubro and InterGlobe Aviation record sharpest declines
Among individual stocks, Larsen & Toubro and InterGlobe Aviation recorded the sharpest declines during the past two sessions. Both stocks fell by around 11 percent, while the Nifty 50 declined approximately 3.4 percent during the same period.
Other stocks that registered declines of around 5 to 7 percent include Adani Ports, Tata Motors, Shriram Finance, Asian Paints, Maruti Suzuki, Adani Enterprises, Bajaj Finserv, Tata Steel, Jio Financial Services, Mahindra & Mahindra, UltraTech Cement and Eicher Motors.
The declines indicate that the pressure is not confined to a single sector, with banking, automobile, metal, infrastructure and financial services stocks all affected.
Technical indicators signal continued pressure
According to Ponmudi R, Chief Executive Officer of Enrich Money, if panic selling intensifies, the 24,200 to 24,000 range could emerge as the next key support level.
From a technical perspective, the Relative Strength Index (RSI) is currently around 36. This places it near the oversold zone but does not yet signal a clear reversal.
The Moving Average Convergence Divergence (MACD) indicator is also showing a negative trend, indicating persistence in the downward movement. Ponmudi said that until the Nifty moves decisively above the 25,300 level, it would be premature to expect stability in the market. For now, a “sell on rallies” approach is being considered more appropriate.
Historical data on market reaction to military tensions
Valentis Advisors Founder Jyotivardhan Jaipuria said that data from the past 25 years indicate that markets typically decline initially after military tensions but tend to recover within a few months.
On average, after a decline of around 6 percent, markets return to their previous levels within roughly one month.
Jaipuria said he is gradually exploring investment opportunities during the current decline. However, he added that monitoring oil prices remains essential, as they could determine the market’s direction at present.
