Did the Nifty sense a weak US jobs report on Friday? Well, if Friday’s price action is anything to go by, the answer would be a yes. But then Indian markets had their own reasons too, that may have triggered a sell-off, which resulted in the Nifty reporting its first weekly loss in four. Friday was also the first instance since August 23, when the Nifty closed below the mark of 25,000.

Friday’s decline though may just not be the end considering the steep fall that Wall Street witnessed after the August jobs report. The S&P 500 posted its worst week since March 2023, the Nasdaq Composite had its worst week in two years, while the Dow Jones also declined 3% for the week.

The sell-off seen in the Nasdaq on Friday may also have a bearing on IT stocks, which have seen a significant run-up off late. Morgan Stanley, in a recent note said that the rally in these names is not done just yet and cited TCS, Infosys, and LTIMindtree as their top picks.

But the actually selling pressure on Friday came from banks. The Nifty Bank fell nearly 1,000 points, while the PSU Bank index fell over 3%. Brokerages too are turning cautious on India’s lenders. Morgan Stanley last week said it is time to turn selective on banks. Goldman Sachs too, downgraded SBI, India’s largest lender, which led to a 4% drop in the stock, and took down other lenders with it as well.

The Nifty now stands at a very critical support level of 24,850 on the downside. During Friday’s fall, the index had managed to defend the 24,800 level on the downside and that will be the first line of defence for the index, in case of a gap-down start.

Foreign institutions were net sellers in the cash market on Friday, while domestic institutions were net buyers. The numbers would be skewed due to the large block in Indigo Paints, where 25% equity had changed hands.

Nifty has a weekly support at 24,770 levels, a break of which can take the Nifty down to levels of 24,350. It has created an engulfing candle on the weekly chart, indicating bearishness in the Nifty, said Praveen Dwarakanath of Hedged.in. On the weekly chart, the RSI divergence is evident, suggesting further downside. No significant writing was seen in In-The-Money Calls, indicating a possible halt of the fall at the weekly support of 24,770 levels, he added.

Aditya Agarwal of Sanctum Wealth said that the Nifty will find strong support around levels of 24,760 and a break below that can drag the index further down towards levels of 24,600.

Kotak Securities’ Amol Athawale said that the Nifty has formed a long bearish candle on the intraday charts and its holding a lower top formation, which supports a further correction from the current levels. 24,820 is a key support from current levels but selling pressure may accelerate before that. On the flip side, only a move above 25,000 can take the index back to 25,100 – 25,150 levels.

The declines in SBI, followed by a sell-off in ICICI Bank, Axis Bank and other constituents took the Nifty Bank down, not only below the 51,000 mark, but also towards a crucial support of 50,500. The Nifty Bank, which was an outperformer compared to the Nifty until Thursday’s close, ended up an underperformer, ending the week with losses.

Kotak Securities’ Athawale believes that as long as the Nifty Bank trades below its 20-Day Moving Average, or the 51,000 mark, the weak sentiment is likely to continue. Below that, the index can fall to levels of 50,000 or even 49,600. Only above 51,000, the Nifty Bank can see a pullback rally towards 51,300 – 51,450 levels.

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
Birlasoft	-1.11%	9.81%
SBI	-4.50%	7.65%
BHEL	-3.56%	6.78%
Indus Towers	-4.62%	5.68%
Tech Mahindra	-0.71%	5.34%

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
IPCA Labs	-1.65%	-9.74%
Chambal Fertilisers	-2.74%	-9.31%
Coromandel International	-1.62%	-7.93%
Biocon	-2.71%	-7.26%
Deepak Nitrite	-2.08%	-6.84%

These are the stocks to watch out for ahead of Monday’s trading session:

• Mazagon Dock Shipbuilders: Bags pipeline repair order worth ₹1,486 crore from ONGC.
• Hindustan Unilever: Announces constitution of an independent committee to evaluate the way forward for its ice cream business.
• Godfrey Phillips: Bina Modi reappointed as Managing Director as 86.64% shareholders voted in her support. On hehalf of the 48% shareholding of the KK Modi Family Trust, over 99.3% shareholders voted in favour of keeping the seat vacated by Samir Modi as empty.
• Ola Electric: One-month lock-in period for shareholders ends.
• Granules India: USFDA inspection for Gagilapur facility completed with six observations.
• Monte Carlo: Collaborates with Salesforce to drive personalised customer experience.
• Suven Pharma: USFDA inspection results in EIR for Hyderabad-based manufacturing facility of arm Casper Pharma. The inspection is classified as Voluntary Action Indicated (VAI) and closed. The facility was inspected between July 8-12, 2024.
• JSW Energy: Issues corporate guarantee of up to ₹450 crore to JSW Energy Utkal, a subsidiary of the company.
• Ion Exchange: Gets order worth ₹168 crore from Technimont SpA, Italy.
• RBM Infracon: Bags order worth ₹3,498 crore from ONGC.