On January 21, 2025, the Nifty 50 index experienced a significant decline, closing at approximately 23,024.65, a drop of 1.37%.
Reasons for the Decline:
- Global Trade Concerns:
- U.S. President Donald Trump’s announcement of potential 25% trade tariffs on Mexico and Canada has raised fears of similar actions against other countries, including India. This uncertainty has negatively impacted investor sentiment.
- Foreign Investor Outflows:
- In January, foreign portfolio investors have withdrawn approximately $6.7 billion from Indian stocks and bonds, reflecting concerns over global trade policies and their potential impact on emerging markets.
- Sectoral Weakness:
- All major sectors recorded losses, with small-cap and mid-cap stocks falling by approximately 2.3% each. Notably, the Nifty Consumer Durables index registered a 4% decline, primarily affected by companies like Dixon Technologies, which saw a nearly 14% drop following its Q3 results.
Technical Support Levels:
The Nifty 50 has breached the psychological support level of 23,000. Analysts suggest the following support levels to monitor:
- Immediate Support:
- 23,000: Previously a key support level, now turned resistance.
- Next Support Levels:
- 22,800: Identified as a potential support area if the index continues to decline.
- 22,670: Further support level, indicating potential areas where the index might stabilize.
Market participants are advised to monitor these levels closely, as a breach below 22,670 could lead to further downside, while stabilization above these supports might indicate consolidation.
