The Nifty 50 extended its losses for a second consecutive session, falling more than a third of a percent on October 21. The index closed well below its short-term moving average, the 20-day exponential moving average (EMA), and continued to trade below its medium- and long-term moving averages (50-day, 100-day and 200-day EMAs), all of which were sloping downward. This signalled broader weakness in the market. Meanwhile, the India VIX climbed to around a four-and-a-half-month high, indicating rising risk and discomfort among bulls.
Adding to the concerns, Brent crude oil futures traded at around $110 a barrel, raising the risk of a higher import bill and inflationary pressures for net oil-importing countries such as India. Market breadth remained firmly in favour of the bears, with broader market indices witnessing sharp declines. The Nifty Midcap 100 and Smallcap 100 indices fell 1.58 percent and 2.37 percent, respectively.
Going ahead, a decisive close below the 22,800-22,700 support zone could open the door for a decline towards 22,500, followed by 22,300-22,200. A break below the latter level could intensify selling pressure. On the upside, the 23,000–23,200 range is expected to act as a key resistance zone, according to market experts.
The Nifty 50 opened with a gap-up on Wednesday, starting above 23,000 and climbing to an intraday high of 23,120. However, the index erased its early gains after the first couple of hours of positive trading and extended its decline as the session progressed. It eventually fell 78 points, or 0.34 percent, to close at 22,811.
On the daily chart, the benchmark index formed a bearish candle with noticeable upper and lower wicks, following a long red candle in the previous session. The formation reflected persistent selling pressure amid heightened volatility.