Taking Stock: Markets recover from day's lows, but sell-off extends to 4th day; Nifty at 22,600

At close, the Sensex was down 125.56 points or 0.17 percent at 73,123.83, recovering 670 points from the day's low, while the Nifty50 index also recovered 228 points from day's low to close at 22,600, down 87.65 points or 0.39 percent. For the week, the BSE Sensex and Nifty 50 snapped their two-week winning streak, declining 2 percent and 2.35 percent, respectively. The broader markets underperformed sharply, with the Nifty Midcap and Smallcap indices falling 2.5 percent and 2.9 percent, respectively.

For the week, the Nifty Midcap 100 index shed nearly 6 percent, a worst weekly fall since October 2024, while Nifty Smallcap 100 lost more than 7 percent, a steepest weekly declines since February 2025. Biggest Nifty losers were Shriram Finance, Tata Motors Passenger Vehicles (TMPV), Adani Enterprises, Tata Steel, Jio Financial, while among the losers were Eternal, Apollo Hospitals, Infosys, Tata Consultancy Services (TCS) and Maruti Suzuki.

All the sectoral indices ended in the red with Consumer Durable down 3 percent, while Realty, Energy, Metal, PSU Bank down more than 2 percent each. Among individual stocks, Godrej Properties shares declined 4 percent after the company reported a 62 percent year-on-year (YoY) fall in Q2 profit. Havells India shares slipped 4 percent after Nomura maintained a Neutral rating on the stock, while Nuvoco Vistas Corporation fell 2 percent despite reporting a 79.2 percent growth in Q2 profit.

BlueStone Jewellery and Lifestyle shares shed 3 percent despite narrowing their Q2 net loss to Rs 3.2 crore, while CreditAccess Grameen plunged 5 percent even as its Q2 profit jumped 299 percent YoY. Among other stocks, Swiggy shares crashed more than 16 percent after the company reported widening of net losses sequentially in its Q2FY27 results, while Cyient gained 6.5 percent despite reporting a decline in consolidated Q2 profit.

Colgate Palmolive India shares declined 5 percent despite a 4.3 percent YoY rise in Q2 profit, while NLC India fell nearly 3 percent after signing MoUs with the Industrial Promotion and Investment Corporation of Odisha (IPICOL) for potential projects. eMudhra shares fell 3 percent after the company's board decided to voluntarily exit the global SSL/TLS certificate business and Cholamandalam Investment and Finance Company shares declined 4 percent ahead of the board meeting scheduled for October 28 to consider raising capital through a qualified institutional placement (QIP).

The Indian rupee ended lower for the second consecutive session on Friday, falling 12 paise to 94.94 per US dollar from the previous close of 94.82. More than 700 stocks touched 52-week low, including Swiggy, Jaiprakash Power Ventures, Inox Wind, NAVA, CreditAccess Grameen, HEG, Afcons Infrastructure, NTPC Green Energy, CEAT, Jupiter Wagons, Reliance Power, Colgate-Palmolive India, Vedanta Aluminium, Torrent Power, CIE Automotive India, Aditya Birla Fashion and Retail, JM Financial, KEC International, Rashtriya Chemicals and Fertilizers, and Swan Corp, among others.

Click to View More Bonfiglioli Transmissions ended 3.5 percent lower at Rs 566 after making a muted debut on the stock exchanges at Rs 586 per share. Zetwerk Manufacturing Business shares fell 6.8 percent to close at Rs 140.70 after debuting at Rs 159, a 5 percent premium over the issue price of Rs 151. Sahajanand Medical Technologies shares rose 9 percent to close at Rs 375 after listing at a premium of nearly 8 percent over the issue price of Rs 344 per share.

Tonbo Imaging India shares surged 65 percent to settle at Rs 1155 after making a strong market debut at Rs 1,160, a premium of around 66 percent over the IPO price of Rs 700 per share. Outlook for October 26 Ajit Mishra, SVP – research, Religare Broking Markets remained under pressure on Friday, extending their losing streak to a fourth consecutive session amid rising crude oil prices and escalating geopolitical tensions.

Despite opening on a positive note, the benchmark indices reversed their early gains as selling pressure intensified through the session. The Nifty slipped below the 22,400 mark intraday, reflecting deteriorating investor sentiment and a lack of sustained buying support. On the sectoral front, IT stocks demonstrated relative resilience, supported by earnings-related optimism and buying interest in select technology heavyweights.

However, weakness across most other sectors weighed on overall sentiment, with metal, realty and energy emerging among the major laggards. The sharp underperformance of midcap and smallcap stocks further highlighted heightened risk aversion and persistent selling pressure beyond frontline stocks. Among the key concerns, Brent crude approached $115 per barrel amid escalating tensions in the Middle East.

For India, persistently high crude prices pose risks to imported inflation, corporate margins and currency stability. Continued foreign fund outflows and uncertainty across global markets further dampened risk appetite, adding to the challenges facing domestic equities. After four consecutive sessions of decline, the Nifty has approached its key support zone of 22,200–22,400. A decisive break down below this range could open the door to further downside towards 21,700.

Conversely, a sustained recovery above 22,900 could revive hopes of a rebound, potentially paving the way towards 23,300. Meanwhile, continued weakness in midcap and smallcap stocks is likely to keep market participants on their toes. We thus recommend traders maintain a cautious stance and prioritise disciplined risk management. Long-term investors, however, may selectively accumulate quality large-cap stocks in a staggered manner, keeping a medium- to long-term investment horizon.

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.