NIFTY LOOKS OVERSTRECHED- REVERSAL LOADING FROM 22300? BANK NIFTY SHOWING A CONTRARY VIEW!

Nifty so far remained inside the fist of Bears despite the initial recovery seen last week it closed near the weekly lows. Brent Oil spilled over the head hitting once again 119$ & above mark as markets tumbled on US-Israel-Iran issue doesn’t seem to deescalate.Meanwhile FII’s sold massively Rs.31,831 cr. worth of stocks in the first half of March’26 series in the Financial Services sector. That’s massive! All these lead the continuous decline in Indian rupee which made another all-time low of 93.826 & if things do not deescalate quick it is highly likely to hit three-digit mark sooner or later & Financial sector may show more pressure in coming days ahead.

As another week pass by Nifty continue to remain volatile as war continues to remain on higher grounds & FII’s remained massive sellerswith net sell of Rs. 29,897.67 cr. worth of equities while DII’s remained massive net buyers with buying of Rs. 30,641.90 cr. FII’s remainedmassivenet sellers in the month of March 2026 with net outflow of Rs. 86,780.89 cr. biggest since Covid sell off in March 2020 while DII’s once again remains massive buyers so far with net inflow of Rs. 1,01,168.60 cr. for the month. DII’s remains main supporter of the Indian Equity markets in March 2026 month. FII’s now once again turned the table where on 23^rd Jan.’26 was highest at 2.28 Lacs which eventually came down to as low as 1.03 lacs but closed the last week net shorts risen to 2.35 lac contracts initially it looked like they may come with positive bias but the substantial form may now looks like incremental shorts have been created which means more pain could be seen ahead on the path on Dalaal Street.

Precious metals once again shown massive weakness. Gold corrected nearly 24.67% from its recent highs of 180779 to hit a low of 136185 a biggest decline in a single week while it now remained inline with nominal gain last week while in Silver which made highs of 420048 & gave a vertical dive towards 225805 a single-handed fall of nearly 46.25% a biggest fall in the history within 2 weeks’ time frame. This sell off may now once again show further weakness towards 1.70 lacs in silver & 1.34 lacs in Gold on MCX within next few weeks.

As the brent crude oil hit 119.13$ per barrel & now gave a decisive close at 112.19$ per barrel which has also lead the consistent fall in rupee which hit all time low of 93.826 to finally give a weekly close at 92.692.

FII’s have been into net sell in 9 months out of 12 in current Fiscal year 2025-26 creating ruckus pressure on the entire markets. In the traders / investors community it has now become a basic question why they are selling? & When this selling would stop?

Why FII’s have been continuously selling in Indian Markets?

In recently launched GDP growth rate of India in Q2 has been 8.20% while it is being projected that it will grow at 7.30% in the Fiscal year 2025-26 while USA has recently shown a GDP growth rate of 4.40% which is furthermore projected to grow at 4.70% so for a Developed economy which is showing nearly 5% of growth lately whereas target country which is still a Developing country with a projected growth rate of 7.60% but its currency is declining on a fast scale why would any institutions go for a Emerging Markets when it can get a growth of nearly 5% in an already developed nation while saving currency devaluation risk. Isn’t it a safer investment for them?

Well, ofcourse yes this could have been a major reason for FII’s to relentlessly sell into the Indian Equity markets.

It has been more than 18 months now starting from October 2024 when Indian markets have consistently remained under pressure & each time some new news item comes to put the additional pressure on the domestic equity markets.

Last week Nifty shown strength initially to hit high’s near to 23862.25 but eventually bears put further pressure to hit new weekly lows towards 22930.35 kind of levels. In the coming week Nifty may face further selling pressure in the coming week as well but this now looks over stretched on the lower levels & this exhaustion could now be witnessed from the crucial turning point of 22300-22500 kind of levels & the pull back from those levels could possibly get us towards the upper levels of 23800-24300 kind of levels on an immediate basis. The coming week may show some relief rally from the lower crucial support levels towards the upper levels. And the relief rally could be initiated by Nifty IT & certain heavy weights like Reliance Industries etc.

However, Bank Nifty shows the other way around as FII’s sold massive Rs. 31,831 cr. worth of equities into the financial sector. So, this may remain under pressure & some initial downside could be witnessed towards 51300-52000 kind of levels further breakdown may take it towards 49000-50000 kind of levels while if positive momentum flow’s we do not see this getting through 56000 anytime soon as of now.PSU banks may continue to show some pressure this time as well while large-cap private banks may try to support the Index somehow.

Nifty IT may continue to find its crucial support at within the range of 26000-28000 kind of levels while a recovery could be seen towards 32000-32800 kind of levels on an immediate basis.

We clearly mentioned earlier that Nifty’s pressure only resembles the pressure of political will rather than fundamental one. FII’s selling has kept its pressure intact to the Indian domestic Equity markets as it went lesser last month the real realization came forward& now the Indian markets growth story rises & the politically backed selling with pressure from the Trump administration to diminish the Indian markets & create an artificial pressure to put an end to the Indo-Russia friendship remains untouched.

India remained on the higher ground on GDP data front where it achieved a milestone with historic growth rate of 7.80% in Q1, 8.20% in Q2 & 7.80% in Q3 of FY 25-26 completely mocking Trump’s “Dead Economy” jibe at its face where India remained on the Top-notch developing economy set for a target of $25 Trillion economy by 2047 on track. However, chairman of Reliance Industries Limited Mr. Mukesh Ambani said in its latest AGM last week that India has the capacity to achieve 10% GDP growth annually which once again has set another long-lasting futuristic goal for the entire economy.

FII & DII’s monthly data so far in the FY 2025-26 has been interesting where FII’s bought in few months initially then abstain from buying or remained to being on the sell side while DII’s remained the biggest supporter of the broader markets. The data below mentioned:

Brent Crude may formed double top at 119-120$ per barrel levels no major upside seen till it sustains below this. Meanwhile, initial support range remains stagnant at 90-100 kind of levels

The Indian Equity markets have gained many recent news items where major of the news items are mentioned below:

• Rupee may now head for triple digit in coming weeks ahead.

• Dollar Index may remain neutral in between 100-101 kind of levels.

• Brent Crude may formed double top at 119-120$ per barrel levels no major upside seen till it sustains below this. Meanwhile, initial support range remains stagnant at 90-100 kind of levels.

On the other side FII’s net longs now near to 13-15%&a recovery is possible towards 24%-27% till the coming weekendwhich continuously signifies &now support could be within the range of22300-22500 in Nifty.

In the wholesome broader markets witnessed some key events & their outcomes last week which are described as follows:

Domestic News:

1. Rare earth magnet bids expected today under ₹7,280 crore scheme to boost domestic output to 6,000 MT/year, fortifying supply chains for auto, defence, and aerospace.

2. SEBI Proposals: The regulator is set to discuss allowing FPIs to settle the net value of cash market trades rather than gross transactions, a move aimed at reducing costs and encouraging foreign capital inflow.

3. HDFC Bank Leadership: The bank has appointed Keki Mistry as the Interim Part-time Chairman following the resignation of Atanu Chakraborty, as it focuses on rebuilding investor trust.

4. Reliance MET City: Its flagship project, Metropolis, has become the first in India to receive the LEED Platinum Pre-Certification, marking a significant milestone in sustainable industrial infrastructure.

5. Industrial Development: The Union Cabinet recently approved the ₹33,660 crore BHAVYA scheme to develop 100 “plug-and-play” industrial parks across India to boost manufacturing.

6. LPG Shortage: Concerns over LPG supply have led BPCL to issue an advisory urging customers not to panic-buy, as the government evaluates the impact of the Hormuz blockade on energy imports.

7. India to reimburse up to 50% of freight and insurance cost hikes for affected small exporters

8. India’s Commerce & Industry Ministry launches RELIEF scheme (Resilience & Logistics Intervention for Export Facilitation) with ₹497 crore outlay

9. IRDAI mandates zero commissions on all insurance products sold via Bima Sugam platform (CNBC).

10. Investments: JSW Realty announced plans to redevelop prime Mumbai property, and HMSI (Honda) plans to invest ₹1,500 crore in a new production line in Rajasthan.

11. Shipping Risks: The Indian government is planning a ₹1,000 crore war-risk fund to provide insurance cover for Indian ships navigating conflict zones in the Middle East.

12. Tax Collections: India’s net direct tax collections rose 7.2% to reach ₹22.80 trillion for the current fiscal year

13. West Asia Conflict: Global energy markets are on edge after Iran’s strike on Qatar’s LNG hub. This has sparked serious concerns regarding India’s energy security.

14. Toyota Production Update: Toyota announced a temporary reduction in output at two of its domestic plants due to delays in receiving critical sensors usually routed through the Middle East.

15. Wholesale Inflation (WPI): India’s WPI inflation accelerated to 2.13% in February, up from 1.81% in January.

16. Vodafone Idea: Shares jumped 5% amid reports that JSW and ST Telemedia are eyeing stakes in the company.

 International news:

1. US-Japan Nuclear Deal: Trump and Japanese PM Takaichi announced a $40 billion nuclear reactor project, signalling a shift in energy strategy.

2. Dubai Explosions: Reports of “heavy explosions” and emergency alerts shook Dubai and Sharjah early today, linked to the ongoing regional tensions.

3. Iran-Gulf Relations: Tehran’s ambassador to Saudi Arabia stated that Iran’s relations with neighboring Gulf states require a “serious review” amid the shifting regional security landscape.

4. Fed Policy Watch: Asian markets are trading cautiously ahead of the Federal Reserve’s upcoming meeting. Bond traders have begun paring back bets against rate cuts, hoping for a more dovish tone from Chair Jerome Powell regarding the war’s economic impact.

5. China’s Stance: Beijing continues to voice “outsized concern” over the Iran situation, given its heavy reliance on Middle Eastern energy and its strategic ties to the region.

6. Global Central Banks: Both the Bank of England (3.75%) and the European Central Bank (2.0%) kept interest rates unchanged, citing geopolitical risks from the Iran conflict.

7. Russia’s Energy Ministry eyes preventive fuel export ban if domestic prices spike

8. US Oil Exports: Asian buyers have scooped up 60 million barrels of American oil this month—the most in three years—as they scramble for alternatives to Persian Gulf crude.

9. Energy Infrastructure Attacks: Iran reportedly launched drone and missile attacks on major energy facilities, including the world’s largest LNG plant in Qatar and refineries in Kuwait and Saudi Arabia (specifically the Samref refinery).

10. Japanese Petrochemical Reserves: The Japan Petrochemical Industry Association has confirmed that domestic inventories of key products like polyethylene remain sufficient for 3.5 to 4 months, providing a temporary buffer against Middle Eastern supply chain disruptions.

11. Cloud Outages in Southeast Asia: The drone strikes on AWS data centers in the UAE have caused cascading latency issues and service disruptions for financial fintech startups in Singapore and Mumbai.

12. Stagflation Fears: Morgan Stanley has issued a “sell” recommendation for Asian stocks, warning that surging energy costs will fuel inflation while stalling economic growth.

Last week Nifty made low’s of 22930.35 to give a close at 23002.15. Nifty shown strength initially to hit high’s near to 23862.25 but eventually bears put further pressure to hit new weekly lows towards 22930.35 kind of levels. In the coming week Nifty may face further selling pressure in the coming week as well but this now looks over stretched on the lower levels & this exhaustion could now be witnessed from the crucial turning point of 22300-22500 kind of levels & the pull back from those levels could possibly get us towards the upper levels of 23800-24300 kind of levels on an immediate basis. The coming week may show some relief rally from the lower crucial support levels towards the upper levels. And the relief rally could be initiated by Nifty IT & certain heavy weights like Reliance Industries etc.

However, Bank Nifty shows the other way around as FII’s sold massive Rs. 31,831 cr. worth of equities into the financial sector. So, this may remain under pressure & some initial downside could be witnessed towards 51300-52000 kind of levels further breakdown may take it towards 49000-50000 kind of levels while if positive momentum flow’s we do not see this getting through 56000 anytime soon as of now.PSU banks may continue to show some pressure this time as well while large-cap private banks may try to support the Index somehow.

Nifty IT may continue to find its crucial support at within the range of 26000-28000 kind of levels while a recovery could be seen towards 32000-32800 kind of levels on an immediate basis.
Sensex may hit its crucial support levels at 72000 kind of levels in the coming week ahead while immediate hurdle may now remain at 77000-78000 kind of levels.
Nifty Financials may find its crucial support levels at 23000 while immediate hurdle lies at 26000-26500 kind of levels.
As of January 2026 the number of Demat Accounts has hit whopping 21.6 crores this not only helps the capital markets directly but also directly to Equity investments.
The monthly SIP in Indian markets now raised towards Rs. 31,002 cr. per month as on December 2025.

Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:

Nifty CMP:  23002.15
Nifty Potential Upside:23800-24300
Nifty Immediate Crucial Support:22300-22500

Sensex CMP: 74532.96
Sensex Potential Upside: 77000-78000
Sensex Immediate Crucial Support: 72000

Bank Nifty CMP:  53427.05
Bank Nifty Immediate Hurdle:56000
Bank Nifty Immediate Downside Target: 51300-52000 / 49000-50000 (As the case may be)

Nifty Financial CMP: 24781.15
Nifty Financial Immediate Hurdle: 26000-26500
Nifty Financial Immediate Downside Target: 23000

Nifty IT CMP: 29199.60
Nifty IT Immediate Target: 32000-32800
Nifty IT Immediate Crucial Support: 26000-28000

Stock on Radar:

Large Caps:

• DLF (CMP 540): This large-cap Reality sector looks good to add on dips towards 520 with strict SL placed at 590 within a month time frame.

• Reliance Industries (CMP 1415): This large-cap giant looks good to add here at 1415 with strict SL placed at 1350 for an estimated possible upside towards 1500 in short run.

About the Author:

Mr. Vishal Gupta, a SEBI Registered Research Analyst, is the founder of “VG STOCK RESEARCH”, founder of “THE ANALYSIS ROOM”, a writer & an advisor having rich experience in Indian Equity Markets, who has spent years comprehending an industry-wide shift and risk management with more than 13+ years exploring in depth analysis of the Equity & Derivatives.

He has also been teaching Fundamental Analysis for quite some time, providing investors/traders with comprehensive knowledge & skills in the Indian Equity Markets.

Email I’d: contact@vgstockresearch.com
Contact: +91-9953934544
Website: https://vgstockresearch.com/
SEBI Reg. No.: INH1000079