Indian stock markets faced continued selling pressure on Friday, January 9, as both major indices extended their losing streak to a fifth consecutive session. Market sentiment remained subdued amid mounting concerns over potential US tariff hikes, trade deal uncertainties, and persistent geopolitical tensions that have weighed on investor confidence.

Market Performance Overview

The NSE Nifty 50 experienced a challenging trading session, opening with an initial uptick before coming under sustained selling pressure throughout the day. The index closed at 25,683.30 points, registering a decline of 193.55 points or 0.75% from the previous session.

Sensex Performance

The BSE Sensex mirrored the Nifty's weak performance, failing to sustain early momentum and tumbling significantly during the session. The 30-share index settled at 83,576.24 points, marking a substantial decline of 604.72 points or 0.72%. This decline pushed the Sensex below the psychologically important 84,000 level, highlighting the extent of selling pressure across the market.

Market Drivers

The continued weakness in Indian markets reflects broader concerns affecting global investor sentiment. Key factors contributing to the selling pressure include:

• Growing concerns over potential US tariff hikes
• Uncertainties surrounding trade deal negotiations
• Lingering geopolitical tensions impacting market confidence
• Sustained foreign institutional investor outflows

The fifth consecutive session of losses underscores the challenging environment facing Indian equities, with both domestic and international factors contributing to the negative sentiment. Market participants remain cautious as they assess the potential impact of global trade policies and geopolitical developments on the Indian economy and corporate earnings outlook.

The Nifty 50 faced intense selling pressure on January 9, losing 700 points from its record high achieved earlier in the week. The benchmark index closed 194 points (0.75%) lower at 25,683, marking its lowest closing level since November 10. During the session, the Nifty hit a day's low of 25,623, marginally above the 100-day EMA at 25,618, before recovering slightly by close.

Technical Analysis Shows Bearish Momentum

The index formed a long red candle and closed below the lower Bollinger Band, extending its correction throughout the week. This resulted in a substantial weekly loss of 645 points (2.45%). Technical indicators have turned decisively bearish across multiple timeframes.

The momentum indicators have generated sell crossovers on both daily and weekly charts. The RSI fell below 40 to 38.55, while the MACD remained below the reference line with a further weakening histogram. On the weekly scale, the MACD turned bearish with the histogram declining below the zero line for the first time since the October 6-10 week.

Key Support and Resistance Levels

Analysts have identified crucial levels for the Nifty's near-term movement. If the index sustains below 25,700, the immediate support lies at 25,580 (20-week SMA), followed by the critical support zone of 25,400-25,300.

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, "A long bear candle was formed on the weekly chart, which signals a sharp reversal in the market after the consolidation movement of the past few weeks. A slide below the support of 25,700 could open further decline down to 25,400 in the coming week."

Bank Nifty Enters Bearish Phase

The Bank Nifty also succumbed to selling pressure, declining 435 points (0.73%) to 59,252. The banking index fell decisively below short-term moving averages and the midline of the Bollinger Bands, accompanied by above-average volumes. For the week, Bank Nifty shed 899 points (1.5%) and formed a long red candle on the weekly timeframe.

Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities, noted that "the rising trendline zone of 59,100-59,000 will act as immediate support. Any sustained move below the 59,000 level could lead to the index extending its weakness further down towards the 58,500 level."

Volatility Index Signals Caution

The India VIX jumped 3.07% to 10.93, extending its upward journey for the second consecutive session and reaching a one-month high. The volatility index surpassed its medium-term moving average, signaling increasing caution among market participants. This elevated VIX level indicates heightened uncertainty and suggests that market discomfort may increase further if it approaches long-term moving averages.

Weekly options data revealed that 25,500 is expected to act as crucial support, with strong resistance at 26,000. Maximum Call open interest was concentrated at the 26,000 strike, while maximum Put open interest was placed at the 25,500 strike, reflecting the market's current sentiment and expected trading range.