Market Summary – Bears Tighten Grip with Fifth Consecutive Decline

Indian equity markets are bracing for another challenging session on Friday, September 26, 2025, following a fifth consecutive day of decline that has pushed benchmark indices below crucial psychological levels. The Nifty 50 closed at 24,890.85 on Thursday, down 166.05 points (-0.66%), breaching the critical 25,000 support level and marking its lowest close since September 9. The Sensex tumbled 555.95 points (-0.68%) to 81,159.68, while Bank Nifty declined 145.30 points (-0.26%) to 54,976.20.

Gift Nifty futures are indicating a weak opening at 24,927, suggesting continued pressure in Friday’s session. The market breadth remained heavily skewed towards bears with 1,987 stocks declining against only 785 advancing on the NSE.

Technical Analysis – Breakdown Below Key Levels

Nifty 50 Technical Outlook

The Nifty has formed a long bearish candle with an upper shadow, indicating strong selling pressure and failed recovery attempts. Key technical observations:

Critical Support Levels:

• 24,800: Immediate and crucial support coinciding with 61.8% Fibonacci retracement
• 24,700-24,750: Next support cluster if 24,800 breaks
• 24,600-24,500: Lower support zone in case of deeper correction

Resistance Levels:

• 25,000: Now acts as immediate resistance after breakdown
• 25,100-25,200: Major resistance zone for any recovery attempt

Technical Indicators:

• RSI: Slipped below 50, confirming bearish momentum
• MACD: Showing negative crossover with reduced bullish momentum
• Moving Averages: Trading below 20 and 50-day EMAs, confirming trend weakness

Seems like a “sell-on-rally” strategy as long as Nifty remains below 25,200, with immediate resistance at 25,000-25,100 range. The breakdown below 25,000 has deepened the bearish trend, with next targets at 24,600-24,500 levels.

Bank Nifty Analysis

Bank Nifty’s fall below 55,000 has turned the tide in favour of bears:

Key Levels:

• Support: 54,800 (immediate), 54,500 (strong support)
• Resistance: 55,200-55,500 (previous support now resistance)
• 100 DEMA: At 54,900 – decisive break could accelerate decline

Pattern: Five straight sessions of failing to cross prior day’s high highlight fading buyer strength.

Institutional Activity – Massive FII Selling vs Strong DII Support

September 25 Flow Analysis

Foreign Institutional Investors (FII):

• Cash Market: Net sellers of ₹4,995.42 crores – the heaviest single-day selling in recent times
• Total Selling: Including derivatives, FII selling exceeded ₹5,000 crores

Domestic Institutional Investors (DII):

• Net Buying: ₹5,103.01 crores – strong institutional support
• Offsetting Impact: DII buying almost completely offset FII selling

Monthly Flow Trends

September 2025 Performance:

• FII Net Outflow: ₹24,454.10 crores – persistent selling pressure
• DII Net Inflow: ₹49,892.88 crores – providing market stability
• Net Impact: DIIs have absorbed significant FII selling but market still under pressure

The continued FII selling due to concerns over H1B visa policy changes and US-India trade uncertainty is creating sustained downward pressure.

Derivatives and Options Analysis

India VIX – Breaking from Historic Lows

The India VIX jumped 2.47% to 10.78 on September 25, showing signs of increased market anxiety after touching lifetime lows of 10.12 earlier in the month. Key implications:

• Rising Volatility: First significant uptick from historic lows indicates growing uncertainty
• Options Premiums: Slight increase in implied volatility making options costlier
• Market Sentiment: Low VIX masking underlying stress but now showing cracks

September 30 Options Expiry Analysis

Critical Strike Levels:

Put Options (Support):

• 25,000 PE: Maximum open interest at 47.44 lakh contracts – strongest support level
• 24,900 PE: 24.37 lakh contracts – secondary support
• 24,800 PE: 15.58 lakh contracts – lower safety net

Call Options (Resistance):

• 25,000 CE: 29.75 lakh contracts – immediate resistance
• 25,100 CE: 31.59 lakh contracts – major hurdle for recovery

Put-Call Ratio: 0.58 – indicating bearish bias and aggressive call writing. However, PCR approaching oversold territory suggests potential for short-covering rally.

Futures Premium: Nifty September futures closed at 24,962, maintaining a 71-point premium over cash market.

Sector Analysis – Selective Outperformance

Sector Performance on September 25

Outperformers:

• Nifty Metal: +0.22% – Only sector in green due to copper supply disruptions and China liquidity measures
• Key Gainers: Hindustan Copper, Hindalco benefited from global commodity strength

Underperformers:

• Nifty Realty: -1.65% – Worst performing sector due to interest rate concerns
• Nifty IT: -1.20% – Under pressure from H1B visa fee hike concerns
• Nifty Auto: -0.90% – Demand concerns weighing on sentiment
• Nifty Banking: -0.75% – Sectoral weakness continuing

Stock-Specific Action

Major Decliners:

• Trent: -4% (top Sensex loser)
• Power Grid: -3%
• Tata Motors: -2.5%
• TCS: Under pressure from IT sector concerns

Resilient Stocks:

• Bharti Airtel: Among few gainers
• Axis Bank: Showed relative strength
• HDFC Bank: Managed to close higher

Global Market Cues – AI Rally Fatigue

 US Market Impact

Technology Sector Concerns:

• AI Rally Stalling: Signs of fatigue in the AI-driven equity rally impacting global tech sentiment
• Valuation Worries: Fed Chair Powell’s comments about equity prices being “fairly highly valued” adding caution
• Sector Rotation: Move away from high-growth tech stocks

 Asian Market Sentiment

Mixed Opening Expected:

• Japan: Nikkei showing resilience with slight gains
• China: Shanghai Composite flat but concerns over property sector
• South Korea: Kospi marginally lower

The global tech selloff is particularly impacting Indian IT stocks already under pressure from H1B visa concerns.

Key Catalysts and Market Drivers

Immediate Concerns

1. H1B Visa Policy: $100,000 fee hike creating uncertainty for IT sector earnings
2. US-India Trade Talks: Ongoing uncertainty affecting business sentiment
3. FII Outflows: Persistent selling creating supply overhang
4. Options Expiry: September 30 expiry creating volatility

Upcoming Events

This Week:

• US Economic Data: GDP, PCE inflation data could impact Fed policy expectations
• India H2 FY26 Borrowing: Government borrowing program announcement
• Options Expiry: September 30 expiry on Tuesday

Trading Strategy and Market Outlook

Short-term Strategy (Friday Session)

For Bears:

• Sell on Rally: Near 25,000-25,100 resistance zone
• Target: 24,600-24,500 if 24,800 support breaks
• Stop Loss: Above 25,200 on closing basis

For Bulls:

• Wait and Watch: Until clear reversal signals emerge
• Support Level: 24,800 crucial for any bounce attempt
• Entry Strategy: Only above 25,100-25,200 for trend reversal

Key Levels to Monitor

Nifty Critical Levels:

• Immediate Support: 24,800-24,750
• Strong Support: 24,600-24,500
• Immediate Resistance: 25,000-25,050
• Major Resistance: 25,200-25,300

Bank Nifty Watch Levels:

• Support: 54,800-54,500
• Resistance: 55,200-55,500

Risk Factors and Market Outlook

Primary Risk Factors

1. Persistent FII Selling: ₹24,454 crores monthly outflow creating sustained pressure
2. Global Tech Weakness: AI rally fatigue impacting sentiment
3. Policy Uncertainty: H1B visa and trade concerns
4. Technical Breakdown: Break below key support levels

Positive Factors

1. Strong DII Support: ₹49,893 crores monthly inflow providing cushion
2. Oversold Conditions: RSI approaching oversold territory
3. Options Support: Strong put base at 25,000 and below
4. Sectoral Rotation: Defensive sectors showing resilience

Weekly Outlook and Conclusion

The Indian equity markets are at a critical juncture heading into Friday’s session, with the fifth consecutive decline bringing Nifty below the psychologically important 25,000 level. The massive FII selling of nearly ₹5,000 crores on Thursday, despite strong DII buying, highlights the underlying pressure on market sentiment.

Technical indicators have turned decisively bearish with RSI below 50, MACD showing negative crossover, and the index trading below key moving averages. The 24,800 level emerges as crucial support – a break below this could accelerate the decline towards 24,600-24,500 levels.

Key Takeaways for September 26:

• Weak opening expected with Gift Nifty at 24,927
• 25,000 now acts as resistance after psychological breakdown
• Sector rotation continues with metals outperforming
• Options expiry dynamics on September 30 to influence trading
• Global tech weakness adding to IT sector concerns

Trading Recommendation: Adopt defensive strategy with focus on risk management. Avoid aggressive long positions until clear reversal signals emerge above 25,100-25,200 levels. Consider sectoral rotation towards defensives like FMCG and metals.

Disclaimer: This analysis is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor before making any investment decisions. Past performance does not guarantee future results.

Analyst Name: Pradeep Suryavanshi
Bestmate Investment Services Pvt. Ltd.:
A-1-605, Ansal Corporate Park Sec-142, Noida 201305
CIN: U74999UP2016PTC143375
SEBI Registration Number: INH000015996
Website: www.bestmate.in    I    Email: info@bestmate.in
Download :- nifty 26-9-2025

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