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Global cues drive down markets and sentiments, bottoms are made in maximum pessimism

ICICIdirect Research 26 Sep 2025 DISCLAIMER

Nifty snapped three-weeks winning streak as worries related to product specific tariff resurfaced. In addition to that, weakness in Rupee as well as FPI's constant sell off weighed the sentiment. Nifty declined 2.7% to settle the week at 24650.
Broader market bore the brunt of benchmark's sell-off, as Nifty midcap, smallcap dropped ~5%, each. All major sectors ended dragged by IT, Pharma, Realty.
Key Highlight: Since April 2025 lows of 21743 Nifty has rallied 18%. Post that there have been seven instances wherein intermediate corrections were within 3-5% range. In current scenario, as index has already corrected 3%, we believe maximum 5% correction will mature around 24200 mark.
What to expect:
In the upcoming truncated week, we expect Nifty consolidate amid stock specific action wherein strong support is placed in the range of 24400-24200 zone. Meanwhile, 25300 would act as immediate resistance.
The key support threshold of 24400-24200 zone is based on following observations:

Over past four months key point to highlight is that, index has managed to defend the key support threshold of 24400 mark while absorbing host of negative news like geopolitical issues, India-Pakistan conflict, tariff concerns, quarterly earnings.
The level of 24400 is aligning with the 200-day EMA
Accumulation Strategy: Current consolidation phase presents opportunities to accumulate quality stocks backed by strong earnings, particularly those positioned to benefit from next-generation GST reforms and upcoming festive season as we believe strong support threshold is at placed at 24200
Sectoral Update: In the current corrective phase, Auto, PSU Banks and Metal sectors have been showing resilience while short term structure of IT, Realty and Pharma have shown weakness.
Key Monitorable:
Development on tariff negotiations
RBI Policy
Monthly Auto sales data post GST reforms

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