On September 26th, benchmark indices fell for the seventh consecutive session, with the Nifty ending below the 24,700 mark. Markets slumped in line with a broad Asian sell-off, as fresh tariffs on pharmaceuticals dented investor sentiment and drove pharma stocks sharply lower.

At close, the Sensex was down 733.22 points or 0.90 percent at 80,426.46, and the Nifty was down 236.15 points or 0.95 percent at 24,654.70. All sectoral indices closed lower, with banks, capital goods, consumer durables, metals, IT, telecom, pharma, and PSU banks falling 1–2.5% each. The market is grappling with several headwinds, including heavy FII outflows, uncertainty over US–India trade, a weakening rupee, and the rising allure of bullion, leaving investors on edge. Midcap and small-cap indices dropped by more than 2% each.

Nifty Outlook

Nifty on the weekly chart has formed a sizable bear candle with a lower high and lower low signaling continuation of the corrective decline. The index in the process retraced more than 61.8% of its preceding three weeks pullback (24433-25448). Immediate trend in the index remains down and a follow through weakness in the coming week will open further downside towards the key support area of 24,400-24,300 levels being the confluence of the last two months and the presence of 200 days EMA. The daily stochastic has approached oversold territory after the recent sharp decline. Hence pullback cannot be ruled out in the coming truncated week. However, only a closing above 25,000-25,100 levels will signal a pause in the current corrective trend.

Bank nifty Outlook

Bank Nifty formed a sizable bear candle with a lower high and lower low signaling continuation of the corrective decline. Bias remains down with immediate support at 53,300-53,500. Index holding above the same will lead to consolidation in the range of 53,500-56,000. Key resistance is placed at 55,500-56,000 levels in the coming week. While a breach below the support area of 53,500-53,200 will lead to acceleration of the decline in the coming weeks.

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Motilal Oswal Financial Services Ltd

Indian equities extended losses for the sixth consecutive day, with Nifty50 closing 236 points lower at 24,655 (-0.95%), dragged by a broad-based decline after US announced a 100% tariff on imports of branded and patented Pharma drugs. Nifty50 has dropped by 3% in past 6 sessions, falling below the key 25k mark. The broader markets underperformed, with Nifty Midcap100 and Smallcap100 down over 2% each.

All sectoral indices ended in red, with IT and pharma leading the declines with loss of 2.5% and 2% respectively. IT stocks witnessed selling pressure after weak outlook from Accenture dampened investor sentiment, along-with continued concerns over the recent H-1B visa fee hike. Pharma stocks fell sharply, after U.S. announced a 100% tariff on imports of branded drugs from October 1st, unless the manufacturer has a production facility in the US. The weakness in currency continued with rupee maintaining levels above its record low of 88.7975 versus the US dollar. Adding to the pressure, sustained FII selling (Rs13,882cr outflows in the last four sessions) weighed on market sentiments. Globally, investors maintain their cautious stance ahead of US retail inflation data to be released later today. 

"We expect markets to remain under pressure in the near term, tracking global headwinds, key macroeconomic data, and potential development around the India–U.S. trade talks," stated Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.