SEPTEMBER SERIES IN FOCUS: CAN NIFTY REGAIN BULLISH MOMENTUM? FII INDEX SHORT COVERING HOLDS THE KEY

As week by week pass on broader market remained stuck near to 24000 while sector / stock specific movement can be witnessed during the same time frame. Its been 12 straight weeks where Nifty remains stuck near to 24000 zone & it looks like there is nowhere to go as neither Bulls nor Bears are seeming like winning. Nifty gave a decisive close at 23873.45 with net loss with net loss of 1.15% while Bank Nifty gave a decisive close at 57369.65 with net loss of 0.22%. While India Vix stands at ticking time bomb at 10.68 if it starts rising then a quick move towards 14-15 could be tested & may bring some volatility into the broader markets.

Meanwhile Nifty Weekly charts showing a minor breakdown where Nifty may show some initial pressure on the start of the week while second half of the week could trigger a buying based on FII’s short covering (Possible from FII’s net shorts rising towards 2.50-2.80 lacs). As we move towards a fresh week an immediate support now lies within the range of 23500-23600 range while immediate potential upside could be towards 24500-24800 for the week while September series could possibly show us 25300+ kind of levels. However, Bank Nifty may show us an immediate crucial support of 56800-57000 kind of levels while immediate potential upside remains at 58700 & any close above this could trigger a move towards 60000-61000 kind of levels in September series itself.

FII’s have been very volatile since last 2 years where major selling has been done by them. In recent last 1 month time frame the FII’s has initiated their buy in Financial Services sector, Healthcare, Consumer Services Sector & IT Sector which denotes the possible short covering in the broader markets could be witnessed majorly by these sectors. Here we can have a brief look on the major inflow & outflow sector wise:

For overall scenario to consider we have below mentioned factors which created havoc & high volatility into the broader markets with the US-Iran war escalating further. Rupee, crude oil, Dollar Index, etc. Let’s dig it out one by one:

1. Rupee: Rupee despite intervention of the RBI intervened with dollar swap auction & issuance of G-sec securities it continued to decline towards 96.655 previous to last week & created a panic in banking & financial sector but as earlier mentioned technically it has perfectly formed a double top formation near to 97 & a cool off towards 94 has almost came we now remains neutral for the time being.
2. Dollar Index: In DXY we remain neutral as of now.
3. Brent Crude oil: Brent crude oil once again is near to 95-96$ per barrel we now expect a cool off towards 86$ per barrel in coming weeks ahead.
4. FII’s Remained Covering Shorts: FII’s net longs & shorts now have once again shown drastic changes where net longs stands near to 10% while net shorts now remain at 2.36 lacs contacts. We expect a saturation in these data & a trend reversal in the Index from Net longs of 7-8% & Net shorts from 2.50-2.82 lacs contracts in the coming week itself.

Nifty Weekly charts showing a minor breakdown where Nifty may show some initial pressure on the start of the week while second half of the week could trigger a buying based on FII’s short covering (Possible from FII’s net shorts rising towards 2.50-2.80 lacs). As we move towards a fresh week an immediate support now lies within the range of 23500-23600 range while immediate potential upside could be towards 24500-24800 for the week while September series could possibly show us 25300+ kind of levels. This time major movement could get triggered by Banking & Financials Sector followed by IT & Consumer Durables goods sector.

However, Bank Nifty may show us an immediate crucial support of 56800-57000 kind of levels while immediate potential upside remains at 58700 & any close above this could trigger a move towards 60000-61000 kind of levels in September series itself. The support may come from large-cap Private Sector banks.

“Nifty IT” sector has shown immense response by FII’s with consistent buying in last 45 days we expect an immediate target of 33000 while crucial support still remains at 29000-30000 this time.

Brent crude oil once again is near to 95-96$ per barrel we now expect a cool off towards 86$ per barrel in coming weeks ahead.

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 2026-27 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:

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

1. Rupee: Rupee despite intervention of the RBI intervened with dollar swap auction & issuance of G-sec securities it continued to decline towards 96.655 previous to last week & created a panic in banking & financial sector but as earlier mentioned technically it has perfectly formed a double top formation near to 97 & a cool off towards 94 has almost came we now remains neutral for the time being.
2. Dollar Index: In DXY we remain neutral as of now.
3. Brent Crude oil: Brent crude oil once again is near to 95-96$ per barrel we now expect a cool off towards 86$ per barrel in coming weeks ahead.
4. On the other side FII’s net longs now near to 9-10% & a recovery is possible towards 17% followed by 27% till the coming weekend which continuously signifies & now support could be at 23500-23600 in Nifty.

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

Domestic News:

1. MCX has indicated on TV that the proposal to allow FPIs in commodity derivatives may not require SEBI board approval.
2. The government is stepping up coal supplies to thermal power plants—using both captive mines and select Coal India subsidiaries—to rebuild inventories as power demand grows at over 10% year-on-year

3. Indian multinational companies are racing against time to review and align their corporate structures with the UAE’s new 15% minimum tax ahead of the upcoming compliance deadline.

4. India has received a temporary diplomatic breather as potential stringent tariff actions (such as heavy US proposed levies) have stalled for now in the legislative process.
5. Mid- and small-cap stocks saw a strong rally driven by positive earnings, while strong foreign inflows pushed the rupee toward a multi-week high.
6. Prime Minister Narendra Modi congratulated Italian Prime Minister Giorgia Meloni on becoming Italy’s longest-serving postwar leader, acknowledging the strong partnership between the two nations.
7. India’s record-breaking diaspora deposit drive has far exceeded expectations, leaving the Reserve Bank of India (RBI) facing a massive liquidity management challenge and a potential cost bill of $10.6 billion.
8. Kumar Mangalam Birla’s group has drawn nearly $2.5 billion (approx. ₹24,000 crore) in loan commitments from four major banks to finance its planned acquisition of Shell’s renewable energy assets in India.
9. The debate surrounding India’s recent Q1FY27 GDP growth data continues, with leaders and experts defending the figures against critique
10. India’s services activity expanded in August, though the pace of growth cooled to its lowest level in four years according to PMI data.
11. RBI Deputy Governor Murmu urged Non-Banking Financial Companies (NBFCs) to diversify their funding streams.
12. A Delhi court granted bail to AAP leader Satyendar Jain in the Delhi Jal Board corruption case.
13. NITI Aayog member Abhay Karandikar urged policymakers to review India’s green financing frameworks (including sovereign green bonds and SEBI green debt) to enable access to capital for nuclear energy, aligning with frameworks like the World Bank and ADB.
14. India and Mauritius signed a 5-year government-to-government petroleum supply agreement where IOC will fulfill Mauritius’ entire import requirement for petrol, diesel, and aviation fuel.

International news: 

1. Private Equity and Venture Capital investments rose sharply in August to $3.3 billion across 99 deals (up 55% year-on-year from $2.14 billion), heavily driven by mega-deals such as Alpha Alternatives’ $787 million road asset acquisition.
2. Apple Maps and Google Maps altered regional feature naming following recent US administrative guidelines.
3. Nvidia reached an agreement to acquire AI developer platform Hugging Face in a deal valued at approximately $12.9 billion.
4. US retail diesel prices have hit an all-time high, with AAA data showing the national average reaching about $5.85 per gallon, surpassing the previous record set in June 2022.
5. World Bank Executive Director Neelkanth Mishra dismissed doubts surrounding India’s GDP growth data, pointing out that high-frequency indicators—such as vehicle sales, credit demand, and cement volumes—show robust underlying economic momentum.
6. Asian equities fluctuated wildly today, driven by swings in South Korean technology shares—acting as a barometer for global AI sentiment—before the regional MSCI index stabilized ~0.6% higher.
7. Bloomberg’s Asia Dollar Index reflects a widening divide: tech-exporter currencies (South Korean Won, Chinese Yuan, Malaysian Ringgit) are outperforming, while energy-dependent currencies (Philippine Peso, Indian Rupee, Indonesian Rupiah) face ongoing pressure from elevated crude prices.
8. The Japanese yen strengthened sharply toward 157 per USD following comments from Bank of Japan officials hinting at potential back-to-back or larger interest rate hikes, placing markets on alert for policy shifts.
9. A new UN report highlighted global concerns over online child safety, revealing that over 20 million children faced online sexual abuse or unwanted sexual content across 21 nations over the past year.
10. Chinese memory maker CXMT filed a lawsuit against the US Department of Defence over its designation as a “Chinese military company.”
11. President Donald Trump nominated Hung Cao as the next Secretary of the Navy.
12. Oil prices hovered near six-week highs following intensified military exchanges between the US and Iran in the Middle East, sparking broader worries over global bond yields and sticky inflation.

Nifty Weekly charts showing a minor breakdown where Nifty may show some initial pressure on the start of the week while second half of the week could trigger a buying based on FII’s short covering (Possible from FII’s net shorts rising towards 2.50-2.80 lacs). As we move towards a fresh week an immediate support now lies within the range of 23500-23600 range while immediate potential upside could be towards 24500-24800 for the week while September series could possibly show us 25300+ kind of levels. This time major movement could get triggered by Banking & Financials Sector followed by IT & Consumer Durables goods sector.

However, Bank Nifty may show us an immediate crucial support of 56800-57000 kind of levels while immediate potential upside remains at 58700 & any close above this could trigger a move towards 60000-61000 kind of levels in September series itself. The support may come from large-cap Private Sector banks.

• “Nifty IT” sector has shown immense response by FII’s with consistent buying in last 45 days we expect an immediate target of 33000 while crucial support still remains at 29000-30000 this time.
• In Sensex crucial supports now remain within range of 75500-76000 range while immediate target could be towards 80000-81000 kind of levels.
• Nifty Financials may find its crucial support levels now at 25600 kind of levels upside immediate target still lies at 28000 kind of levels.
• As of January 2026 the number of Demat Accounts has hit whopping 22.9 crores this not only helps the capital markets directly but also directly to Equity investments.
• The monthly SIP in Indian markets have now increased to All Time High of Rs. 32,087 cr. per month as on March 2026.  

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

Nifty CMP:  23897.70
Nifty Potential Upside: 24500-24800 / 25300+ (As the case may be)
Nifty Immediate Crucial Support: 23500-23600

Sensex CMP: 76515.43
Sensex Potential Upside: 80000-81000
Sensex Immediate Crucial Support: 75500-76000

Bank Nifty CMP:  57369.65
Bank Nifty Immediate Upside: 58700 / 60000-61000 (As the case may be)
Bank Nifty Immediate Crucial Support: 56800-57000

Nifty Financial CMP: 26051
Nifty Financial Immediate Target: 28000
Nifty Financial Immediate Crucial Support: 25600

Nifty IT CMP: 30695.15
Nifty IT Immediate Target: 33000
Nifty IT Immediate Crucial Support: 29000

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 14+ years exploring in depth analysis of the Equity & Derivatives.

He has also been into teaching Fundamental Analysis for quite some time giving investors/traders comprehensive knowledge & skills of Indian Equity Markets.

Email I’d: contact@vgstockresearch.com
Contact: +91-9953934544
Website: https://vgstockresearch.com/
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