The Indian equities market closed the week on a cautious note, with the Nifty 50 slipping below the critical 22,800 mark to end at 22,795.90, down 117.25 points or 0.51%. The benchmark BSE Sensex also reflected this weakness, shedding 424.90 points or 0.56% to settle at 75,311.06.

Market Analysis:
The market downturn was primarily driven by declines in various sectors, including Auto, Pharma, and Healthcare indices, which saw losses of nearly 2%. The pharmaceutical stocks took a hit following former U.S. President Donald Trump’s unexpected announcement of new tariffs on pharmaceuticals. However, the metals sector stood out as a bright spot amid the chaos, with optimism surrounding potential protectionist measures against Chinese imports.

Key Insights:
Industry analysts believe that with the breach of the key support level of 22,800, the downward trend in the market may continue. The next crucial support to monitor is at 22,500, while resistance levels are identified at 23,000 and 23,200. Experts anticipate that the Nifty will likely trade within the 22,500-23,200 range in the upcoming week.

Critical Drivers:
Trump’s mention of reciprocal tariffs on India and China contributed to market anxiety and uncertainty, particularly affecting export-driven sectors like pharma. Foreign institutional investors (FIIs) sold off Indian equities worth Rs 3,449.15 crore, while domestic institutional investors (DIIs) emerged as net buyers, purchasing shares worth Rs 2,884.61 crore. A small red candle on Nifty’s daily chart with minor upper and lower shadows indicates heightened volatility and investor uncertainty.

Expert Analysis:
Financial experts observe that Nifty is hovering around the critical 22,700 support level, which aligns with the 38.2% Fibonacci retracement. The lack of a strong rebound from this level suggests ongoing market weakness. If Nifty decisively breaches 22,700, it could potentially drop to 22,450 in the short term, requiring a breakout above 23,000-23,100 for upside momentum.

Currency and Commodity Trends:
The rupee depreciated by Rs 0.05 to 86.70 against the dollar, despite a decline in the dollar index to $106.60. Speculation around lower import duties on electric vehicles (EVs) and FII selling contributed to currency pressure. Furthermore, Brent crude futures fell 2.68% to $74.43 per barrel, while WTI dropped 3.12% to $70.22, offering some relief to oil-sensitive sectors.

Market Sentiment and Outlook:
The Federal Open Market Committee (FOMC) minutes reinforced a hawkish stance, dampening hopes of rate cuts and fostering uncertainty in global markets. Market turbulence hit small-cap stocks hard, with over 400 shares experiencing losses. On the other hand, select midcaps and largecaps remained resilient. India’s underperformance compared to its Asian counterparts, driven by FII outflows, raises concerns. Analysts predict that market sentiment will likely remain cautious until corporate earnings recover meaningfully and global liquidity conditions improve.

Future Projections:
Experts suggest that if the downward trend persists, Nifty could slide towards 22,500 in the short term, while any recovery may encounter strong resistance around the 22,850 level.

In conclusion, it is essential for investors to carefully assess market conditions and consult with a qualified financial advisor before making any investment decisions.