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Below the Quote on Weekly Market Analysis : Markets fall 4th week, down 2.5% on FII outflows, weak earnings by Ajit Mishra – SVP, Research, Religare Broking Ltd

Markets extended their losses for the fourth consecutive week, dropping over 2.5%. Following a subdued start, the market sentiment remained negative throughout the week, primarily driven by persistent foreign fund outflows and underwhelming earnings reports. As a result, both benchmark indices, the Nifty and Sensex, closed near their weekly lows at 24,180.80 and 79,402.29, respectively.

Sector-wise, realty, metals, and auto experienced notable declines, although IT managed to hold steady. One major concern for traders has been the sharp drop in broader indices, down between 5.75% and 6.45%, following weeks of relative outperformance.

Two primary concerns — foreign institutional investors (FIIs) selling and weak earnings — are expected to continue influencing sentiment into the coming week. Additionally, key players like Adani Ports, Bharti Airtel, Cipla, Dabur, and LT are set to announce their earnings, which will be closely watched. The upcoming expiry of October derivatives contracts is also expected to increase volatility, and with the new month, auto sales data will provide further cues.

Despite the lack of alignment with global markets, the U.S. market performance will remain relevant, particularly with continued speculation on rate cuts and the upcoming presidential election. Over the past week, the Dow Jones Industrial Average (DJIA) declined by over 2.5%, while the S&P 500 and Nasdaq Composite showed mixed trends, ending flat to marginally lower.

The Nifty index is approaching support near the 24,000 level after four weeks of decline. A break below this could further weaken sentiment, potentially pushing the index toward the 200-day exponential moving average (DEMA) around the 23,450 mark. On a rebound attempt, resistance could emerge first at the 100 DEMA near 24,500 and then around 24,850. Although most sectors, except IT, remain under pressure, oversold conditions might trigger selective rebounds. Traders should continue with a "sell on rise" strategy and exercise extra caution, especially with midcap and smallcap stocks. Amid the prevailing negativity, investors may consider gradually accumulating high-quality stocks with a long-term investment horizon.

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