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Benchmark indices ended lower in a volatile session on September 2, marking the first Tuesday expiry under the new weekly derivatives settlement cycle. The Nifty 50 closed marginally in the red. The Sensex retreated sharply, slipping over 700 points from its intraday peak, as profit-taking in heavyweight banking and financial counters exerted downward pressure. The Nifty 50 opened on a flat note but witnessed a short-covering-led upmove in the early part of the session, scaling an intraday high of 24,756. However, the index failed to sustain higher levels amid selling pressure at resistance zones, eventually settling at 24,579.60, down 45.45 points or 0.18%.

Broader markets outperformed, with the Nifty Midcap and Smallcap indices ending in the green, reflecting continued rotational interest. Sectoral performance was mixed. Defensive buying in FMCG stocks led the Nifty FMCG index to close with a 1.1% gain, while Nifty Media and Nifty Energy advanced 0.99% each. The Nifty Metal index added 0.85%, supported by firm global commodity cues. Realty, PSU Banks, and Infra pockets also clocked modest gains amid stock-specific action. On the flip side, profit-booking was evident in the Auto, private bank, and Pharma spaces, with the indices shedding 0.7% and 0.2%.

Nifty Outlook

The index formed a small bear candle with a higher high and higher low, signaling consolidation amid stock-specific action on the Nifty weekly expiry session. In yesterday's session index after an initial up move witnessed profit booking from around the 50-day EMA placed around 24,800 levels. Going ahead index is likely to extend consolidation in the range of 24,400-24,800. Immediate support is placed at 24,400-24,337 levels, being the confluence of the recent lows and the key retracement area. A breach below the same will signal acceleration of decline towards the key support area of 24,000-23,800 levels, being the confluence of the 52-week EMA and the previous major lows and the previous major breakout area.

Bank Nifty Outlook

Bank Nifty formed a sizable bear with a higher and lower low signaling selling pressure around the 54,000 levels. The index is currently placed around the 200-day EMA. Going ahead, index holding above the 200-day EMA placed around 53,500-53,200 will lead to consolidation in the range of 53,200-55,000 in the coming sessions. Bank Nifty has immediate support at 53,200-53,500 levels being the confluence of the 200-day EMA and the low of May 2025. A breach below the same will signal acceleration of decline towards the key support area of 52,500-52,000 levels. 

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