The Indian stock market faced substantial selling pressure last week, with benchmark indices recording significant declines. The Nifty 50 index ended 2.37% lower, while the BSE Sensex dropped 2,185 points. The broader market experienced even more pronounced weakness, as the Nifty Mid-cap 100 Index slipped 0.79% and the Nifty Small-cap 100 plunged 1.81%. Market breadth deteriorated sharply, with the BSE advance-decline ratio standing at 0.34, indicating widespread selling across mid and small-cap stocks.

Market Performance Analysis

Sectoral performance showed mixed trends during the period. The Defence index managed to gain 1.30%, while India Tourism, Oil & Gas, and Energy indices shed over 5%. NSE cash market turnover was lower by 2% compared to the previous session, reflecting reduced trading activity amid the market decline.

Technical Outlook and Key Levels

Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher, noted that market sentiment has turned nervous as the Nifty 50 index broke below the 50-DEMA support of 25,900 and approached the 20-DEMA support at 25,530. The index breached the 25,700 zone, with the next major support positioned near the 200-period MA at the 25,000 zone.

For the Bank Nifty index, Parekh observed continued weakness with the index ending near 59,250. The important near-term support is positioned at 58,700, with the next major support near the 200-period MA at 56,300.

Intraday Stock Recommendations

Parekh has identified three stocks for intraday trading based on technical chart patterns and support levels:

Tata Capital

• Entry Price: ₹355.00
• Target: ₹375.00
• Stop Loss: ₹345.00
• Rationale: The stock is in a bull trend with chart patterns suggesting the next round of upside momentum

IGL

• Entry Price: ₹186.00
• Target: ₹192.00
• Stop Loss: ₹182.00
• Rationale: The stock has formed a double bottom at ₹180.00 and appears poised for upside movement

OIL

• Entry Price: ₹420.00
• Target: ₹440.00
• Stop Loss: ₹410.00
• Rationale: The PSU stock is close to its support level at ₹410.00 with chart patterns suggesting trend reversal

Precious Metals Hit Record Highs

Gold and silver prices surged to record highs in international markets, driven by a weak US dollar and elevated geopolitical tensions. Silver rates opened with an upside gap and touched an intraday high of $83.88 per ounce, eclipsing the previous peak of $82.67 per ounce. Gold rates similarly opened with an upside gap, reaching an intraday high of $4,612.40 per ounce.

The precious metal rally was attributed to the weak US dollar following the US Justice Department's threat of potential criminal indictment against the Federal Reserve, combined with intensifying protests in Iran that elevated geopolitical tensions.

Indian stock markets are positioned for a cautious start on Monday, with early indicators suggesting a flat-to-neutral opening amid mixed global cues. Gift Nifty trading at 25,809.50 reflects a modest decline of 7.50 points or 0.1% from the previous close, signaling subdued investor sentiment as markets navigate ongoing uncertainties.

Market Performance and Outlook

Domestic indices extended their losing streak on Friday, marking the fifth consecutive session of declines. The benchmark indices faced significant pressure from multiple headwinds, including renewed concerns about US tariffs and persistent foreign capital outflows.

Ponmudi R, CEO of Enrich Money, noted that while early global cues are mildly supportive, Indian markets may continue trading cautiously due to ongoing trade and tariff-related uncertainties weighing on sentiment.

Asian Markets Show Resilience

Asian markets demonstrated positive momentum on Monday morning, providing some support for regional sentiment. The gains followed strength on Wall Street after a US jobs report showed weaker-than-expected job creation in December, despite a decline in unemployment rates.

Japanese markets remained closed due to a holiday, while Hong Kong's Hang Seng Index futures indicated a higher opening.

Geopolitical Tensions Drive Commodity Markets

Escalating tensions between the US and Iran have significantly impacted global commodity markets, particularly precious metals. Gold surged to an all-time high near $4,600 per ounce, driven by geopolitical uncertainties and a criminal probe into Federal Reserve Chair Jerome Powell.

President Trump has been considering various measures against Iran following its crackdown on protesters, which human rights organizations claim has resulted in more than 500 deaths. Iran responded by warning that US and Israeli military bases in the region could be viewed as "legitimate targets" should any military action be taken.

Currency and Wall Street Performance

The US dollar retreated from a one-month high, with the dollar index declining 0.3% to 98.899, breaking a five-session winning streak. This decline followed the launch of a criminal probe into Federal Reserve Chair Jerome Powell, heightening friction with the Trump administration.

Wall Street closed at record levels on Friday, with the S&P 500 rising 0.65% to 6,966.28, the Nasdaq Composite advancing 0.81% to 23,671.35, and the Dow Jones Industrial Average climbing 237.96 points or 0.48% to 49,504.07.

Investors are closely monitoring key Q3FY26 IT earnings scheduled for release on Monday, while maintaining a cautious stance amid persistent uncertainty over US-India tariff discussions and escalating geopolitical tensions. The combination of domestic challenges and global uncertainties continues to weigh on market sentiment as traders navigate this complex environment.