Even a four-day week led to a ₹20 lakh crore wipe out in investor wealth. The month of February concluded on a painful note on Friday, as did the start of the March F&O series. The month of February had 20 trading sessions for the Nifty and only two of those saw a green tick at the end of the trading session. Such has been the pain in the markets.

There has been a constant shift of levels which were to act as strong supports for the Nifty through the month, but the index has respected none of those. There was 22,800 at first, which the bulls defended with all their might, but failed eventually. That level then went to 22,500, and that too was taken out on Friday with poor global cues and the fear of Trump’s tariff imposition.

With 22,500 gone convincingly post Friday’s drop, the focus has now shifted to levels of 22,000, followed by 21,800 on the downside. In case 21,800 does happen, it would mean that the Nifty has given up all the gains it made since the closing of June 4, which was the day the Lok Sabha election results were declared.

If it has been a struggle for the Nifty, which has declined 16% from its September 2024 peak, it has been even more painful for the broader markets. 88 stocks on the Nifty Midcap index ended lower on Friday, while 94 of those ended in the red on the Nifty Smallcap. The Midcap index is down 22% from its peak, while the Smallcap index has already shed 25% from the top.

Monday’s session will see the market react to India’s GDP data, which came in-line with expectations at 6.2% as well as the Auto sales numbers which were reported for the month of February. US markets had a strong session on Friday but that can be attributed to index rebalancing and adjustment-related buying.

Despite the MSCI rebalancing flows trickling in on Friday, the FII sell figure was a hefty one, which reflected on the screen as well. Domestic institutions continued to remain net buyers.

What Do Experts Make Of The Fall?

“It is always the better strategy to wait for the market to tell you that it’s bottoming out and once it’s done that and given you a reversal signature, that is the better strategy to get inside the market. Until that point, you stay in cash, do nothing. I am not a great fan of SIP and I would rather be outside the market and regret it, rather be in the market and regret I wished I was outside the market. The indications are right now still the momentum is pretty strong to the downside, oversold but in a bull market, market shouldn’t get oversold. It stays above oversold levels. So getting oversold is a sign of market weakness, unlike what others say,” Jai Bala of cashthechaos.com said.
Dipan Mehta of Elixir Equities said, “From a valuation perspective, we are back to where we started and that gives us a lot of comfort that we are getting into a good zone where if you buy for a long term, three, five years or so, you will be able to get very good returns from this point of time. Again, the focus has to be in small midcap stocks only where there is still growth and growth can certainly revive because of steps taken by the government and the budget per se and even the RBI. We are getting confident by the day that these are good levels to buy.”

“Corrections are a part and parcel of any market. However, in the last three years, market participants have not seen such a correction and buy on dips made money. When such corrections happened and a large part of incremental investors have joined the market in the last 3-4 years, it actually played on a sentiment side very badly. In the first phase you throw in the towel for every company good that there’s no discrimination and I think that is what is playing out. The structure of the market in the last four years have never seen a sharp correction like this and sentimentally people are completely taken aback that how it can happen. But if you just take an objective view and just take a 18-24 months and a slightly longer call, I think on the hindsight it will look like a great opportunity,” said Pankaj Tibrewal, founder and CIO of IKIGAI Asset Manager.

The Nifty Bank was an outperformer on Friday if we go by pure numbers as it did not fall as much as the Nifty did, although even that index ended with losses of 400 points on Friday. The index is now headed towards 48,000 levels on the downside but is still over 3,000 points away from its recent 52-week low of 45,828, which it had incidentally hit in the month of March last year.

Om Mehra of SAMCO Securities said that the daily RSI remains below 40 and a negative MACD crossover indicates that the downside risk still persists for the Nifty Bank. The next key support stands at 47,840. However, any attempt to catch the bottom can be premature until a decisive weekly reversal signal emerges, he added.

The Nifty Bank has a strong resistance at 49,000 on the upside, while 47,840 will act as a strong support, said Hrishikesh Yedve of Asit C Mehta Investment Interrmediates. He advises watching these levels for potential trading opportunities.

What Are The F&O Cues Indicating?

Fresh short positions were seen in these stocks on Friday, meaning a decline in price but an increase in Open Interest:

Stock	Price Change	OI Change
Manappuram	-4.28%	55.95%
Voltas	-1.01%	21.52%
UltraTech	-3.49%	16.28%
Sona BLW	-2.23%	11.92%
Macrotech	-4.60%	11.73%

Unwinding of long positions was seen in these stocks on Friday, meaning a decline in both price and Open Interest:

Stock	Price Change	OI Change
Coforge	-2.93%	-8.87%
Berger Paints	-1.82%	-8.08%
Info Edge	-5.30%	-7.73%
Oberoi Realty	-1.99%	-4.99%
L&T Technology Services	-2.75%	-4.20%