Market analysts, however, suggest that the weakness is part of a broader structural trend rather than the start of a major reversal.
Dharmesh Shah from ICICI Direct explained the ongoing slide by pointing to the last two trading sessions: “Yes, definitely, we are seeing a weakness for last two trading sessions where the Nifty seems to be breaching the 26,000 level and post that we have seen a more of a panic type of a situation in the market where the midcaps and the smallcaps are also seeing a selling pressure.”
Despite the turbulence, Shah believes the market is undergoing a healthy correction within a bull phase. According to him, the Nifty is likely to stabilise within a well-defined zone. “We expect Nifty to find a strong support in this range of 25,500 to 25,700 and it should be looked as a buying opportunity… expecting Nifty to back to 26,000 to 26,100 in the coming days.”
Shah also noted that nearly three-fourths of Nifty 50 constituents continue to maintain a positive structure on the weekly charts. He said the index is likely to consolidate within 26,300 to 25,700 over the next couple of weeks.
On the banking front, Shah maintained a constructive stance. “I believe 58,000 to 57,900 remains to be the very strong support for the Bank Nifty and eventually, Bank Nifty should look for a target of around 59,500 to 59,800.” He added that near-term volatility may persist due to the upcoming US Fed meeting and ongoing US-India tariff discussions, but he does not expect the broader tone to turn bearish. “Maybe the short term it is a pain but it is a good buying opportunity I would say.”
Largecaps Preferred; L&T Emerges as Top Pick
In a market struggling for direction, Shah continues to prefer stability over high-beta names. When asked about specific stock ideas, he said: “Absolutely, the way the market seems to be forming, I believe so it looks like more towards the largecaps, so it is largecap that looks more safer at the current market price.”
With the Budget approaching in January, Shah expects renewed interest in capital goods, a sector that has corrected sharply in recent months. “Capital goods as a sector which is not in the limelight for the long time should be action as we are nearing towards the budget and where I believe L&T remains to be our top pick.”
He highlighted the stock’s technical resilience: “L&T again in particular remains to be our top pick where the 14 months of long consolidation breakout was witnessed, we believe the 3900, 3800 remains to be the very strong support for the L&T which expect to hold and eventually L&T should be looked for target of around 4500.”
