Midcaps post steepest fall in 2 years; Swiggy, KEI Industries, Motilal Oswal Financial among top drags

The Nifty Midcap 100 index shed 5.6 percent, a worst weekly fall since October 2024. Swiggy, KEI Industries, Motilal Oswal Financial Services, Mahindra and Mahindra Financial Services, Suzlon Energy, Bharat Heavy Electricals, Tata Investment Corporation, Exide Industries fell between 10-25 percent. The Nifty Smallcap 100 index shed more than 7 percent, a steepest weekly declines since February 2025.

Himadri Speciality Chemical, CreditAccess Grameen, Urban Company, Deepak Fertilisers And Petrochemicals Corporation, Aarti Industries, Ola Electric Mobility, IIFL Finance, Hindustan Copper, Inox Wind, JM Financial, Garden Reach Shipbuilders & Engineers, Reliance Power shed 12-25 percent. All the sectoral indices ended in the red with Nifty Defence index shed 7 percent, Nifty Consumer Durables index declined 6.4 percent, Nifty Capital Markets index fell 6 percent, while Nifty Metal, Media, and Realty shed 5 percent each.

"Indian equity benchmark indices resumed their downward trajectory this week as investor sentiment turned sharply cautious. The Nifty 50 shed nearly 2.36%, while the BSE Sensex dropped around 2.15%, breaking brief consolidation phases to close markedly lower. The primary catalyst behind this sell-off was the relentless surge in crude oil prices. Brent crude extended its gains for a fourth consecutive week, breaching the $117 per barrel threshold.

This sharp spike stems from deepening Middle East geopolitical conflicts and supply chain vulnerabilities, directly triggering inflation fears and escalating fiscal deficit concerns for energy-dependent economies like India," said Ravi Singh, Chief Research Officer from Master Capital Services. Adding heavy pressure to the markets was severe profit-booking and dumping across broader indices. Midcap, Smallcap, and Microcap segments suffered disproportionate losses, reflecting a quick retreat from high-beta and expensive domestic valuations as liquidity tightened."

"Domestic liquidity conditions were further constrained by major primary market activity. The highly anticipated Reliance Jio mega-IPO soaked up massive institutional and retail liquidity, diverting secondary market capital into primary lock-ins and leaving equity benchmarks vulnerable to selling pressure. Globally, macro headwinds intensified the decline. Foreign Institutional Investors (FIIs) accelerated their net selling streak, shifting funds toward safer fixed-income avenues amid elevated global risk," he added.

Foreign institutional investors (FIIs) remained net sellers for the ninth consecutive week, offloading equities worth Rs 2,697.37 crore, although the selling eased. Meanwhile, domestic institutional investors (DIIs) continued to support the market, purchasing equities worth Rs 10,942.19 crore during the week. The market capitalisation of BSE-listed companies declined by more than Rs 20 lakh crore during the week.

Where is market headed? Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities The selling pressure continued in the market on Friday with the Index and broader markets witnessing an intense fall. A reasonable bear candle was formed with long lower shadow on the daily chart on Friday after the formation of Doji type candle pattern on Thursday. The chances of positive impact post doji has been negated as Nifty moved below the low of pattern at 22554 levels, before recovering towards the end-during CAS session.

The overall market breadth was week, and sharp decline was seen in broad market indices like microcap, midcap and small cap segments on Friday. The overall negative chart pattern and inability to sustain the opening gains signals negative outlook for Nifty for the short term in the coming sessions. The next lower supports to be watched around 22300-22200 levels and any bounce could find strong overhead resistance around 22800 levels.

Amol Athawale, VP Technical Research, Kotak Neo Technically, the index formed a long bearish candle on the weekly charts, indicating further weakness from the current levels. We believe that the short-term market outlook remains weak; however, the possibility of a trend reversal from the current levels cannot be ruled out. For traders, the 20-day SMA (Simple Moving Average) or 22,700 for Nifty and for Sensex 73700 would act as an immediate resistance zone.

If the market succeeds in trading above this level, we could expect a sharp pullback rally to 23,000–23,200/74000-74600. On the flip side, below the 20-day SMA, weak sentiment is likely to continue. Below this level, the market could retest 22,400–22,200/73400-72800. For Bank Nifty, the 20-day SMA or 55,000 would act as a trend-deciding level. Below this level, the index could slip to 53,500–53,200.

On the flip side, above 55,000, it could move up to 55,500–55,800. Vatsal Bhuva, Technical Analyst at LKP Securities Nifty has broken below its 200-WMA on the weekly chart and 20-DMA on the daily chart, weakening the overall market structure. The lower-high formation remains intact, indicating that the recent upmove was merely a pullback or relief rally. A hidden bearish divergence on the RSI further signals the possibility of downtrend continuation.

The 22,200 level remains a crucial support; a decisive breakdown could trigger another leg of selling. Immediate support is placed at 22500, while resistance lies at 22,700–22,800. Traders should remain cautious, trade strictly around key levels, keep positions light, and monitor Brent crude, as a rise above $110 could further dampen market sentiment.