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Elevated Crude and global bond yields keep Nifty deflated while broader markets continue to do well

ICICIdirect Research 04 Sep 2026 DISCLAIMER

The spike in crude oil prices amid geopolitical escalation dented the market sentiment, resulting in Nifty extending losses over four consecutive week to settle ~ 23960, down 0.9%. Defying the benchmark move, small caps index continued their record setting spree over third week in a row, up 0.5%. 
Sector rotation continued with Real Estate, Oil & Gas gaining traction while Auto, Consumer Durables seen profit booking

Technical Outlook
Nifty extended correction on the backdrop of 4 months rising trendline breakdown. However, broader market remained in limelight yet again. Therefore, focus should be on the broader market while Nifty witness subdued traction.
Going ahead, Key support is placed at 23600 being July low. Meanwhile, a decisive close above psychological 24000 mark would confirm conclusion of corrective phase and open the door for 24400 in the coming weeks. 
Historically, two decades data suggest that September has been the volatile month. However, such volatility has paved the way for direction move in subsequent months
Indian Rupee has appreciated 0.9% on the back of FCNR deposits. Consequently, it recorded breakdown from 16 Months rising trend line. The fall in USD/INR could provide a favourable backdrop for the broader equity markets and trigger fresh buying interest.
After Brent crude peaked at $120 in March, intermediate rallies have exhausted around the 80% retracement of prevailing decline. Following the historical rhythm, the current 80% mark is placed at 97 which would be the key level to watch out for.


Key Monitorable
US Inflation print
Fall in crude oil
US bond yields

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