2025 has begun on an extremely sombre note for the Indian markets with stocks getting battered and bruised brutally. The pain for the large caps have gotten extensive whereas the Mid Caps and Small Caps have got a pounding pummelling. Investor sentiments have been dented severely and even a recovery may not help in confidence getting restored. The reason is because the fall happens to be a little too hard to digest because just months ago Nifty was scaling new peaks with market moguls shouting to the rooftops about this being a simply unstoppable euphoric wave only for it to dissipate almost beyond repair just few months down the line.
The Indian markets always tend to show extreme frenziness both on the upside as well as downside. When the ride was smooth, it appeared as the markets were heading towards uncharted territories with expectations of even a Nifty 30,000 and Sensex 100,000 not really expected to be a distant dream. At the same time the way it has plummeted much against the tide despite the global markets largely staying put tends to defy logic. But that's the way it is and the Indian markets have always been known to make drastic moves with induced volatility and heightened unpredictability.
Coming to the actual indices points equation, the way as it stands today as of end February is that Nifty is just within striking distance of breaking the 22,000 barrier. It has completed a fall of well over 4,000 points from the time it registered it's record high of 26,277.35 on the 27th of September 2024. The large caps have been hit no doubt but the pain in the broader market has been even more unrelenting and unending. Falls are part and parcel of the game but one feels this is being overdone.
It would be good to analyse few data points with respect to the Nifty pattern since the beginning of 2024. The year 2024 in general was a good year for the Nifty 50 index except for the last quarter of the year when the correction started setting afoot. It was the year 2024 when Nifty hit plenty of 1000 point milestones with the landmarks of 22000, 23000, 24000, 25000 and 26,000 all being breached. All these however happened within the first 9 months of the year from Jan to Sep. October was a watershed moment with record selling by the FIIs making the Nifty to cart and since then it's been one way street downhill which has only extended much into 2025.
One important point to note is that in 2024, despite Nifty 50 constantly hitting new peaks and milestones, it always got pulled back within a short span of time only to retrace back and reach newer heights. This was pretty much evident especially in the first 3 quarters of the year. After the election results, Nifty saw a major wave on the upside reaching the magical mark of 26,277.35 in September end and after that started tanking with 5 straight months of fall from Oct'24 to Feb'25 which is the first time it has happened in 29 years since it's inception in 1996.
Let's briefly look at the dilly dally pattern affiliated with Nifty in the first 3 quarters of 2024 from Jan 2024 to Sep 2024
Jan 2024:
15th Jan, Nifty scales a new peak of 22,115
29th Jan, Nifty gets pulled back to 21,433
Difference 682 points
Feb 2024:
2nd Feb, Nifty again forges ahead to hit new lifetime high of 22,126
14th Feb, Within less than a fortnight tanks again to hit a low of 21,543
Difference 583 points
Mar 2024:
11th Mar, Nifty comes back hard to register another new high of 22,526
20th Mar, In just about a week Nifty gets backtracked sharply and falls to a low of 21,710
Difference 816 points
Apr 2024:
10th Apr, Nifty again on the attack usurping it's previous high to reach new summit of 22,775
19th Apr, Nifty gets hammered once again on the downside to reach a low of 21,777
Difference 998 points
May 2024:
3rd May, Nifty makes a surge to hit another record high of 22,794 falling agonisingly close to 22,800
13th May, Nifty falls back sharply to register a low of 21,828
Difference 966 points
27th May, the month was not done yet with Nifty leapfrogging again to touch 23,000 and hit a new lifetime high of 23,110
30th May Within 3 sessions it again retraces sharply to fall all the way back to 22417
Difference 693 points
Jun 2024:
3rd June - On the back of exit poll results Nifty jumps big time to break new all time high heading all the way up to 23338
4th June - Just the next day, on account of election results not being as per pollsters, Nifty falls drastically to hit an intra-day low of 21281
Difference 2057 points
Jul 2024:
19th July - It took less than a week for Nifty to regain back it's high by Jun 10th and since then it was on a one dimensional way up registering a record high of 24,854
25th July - The same story took place yet again albeit after a small interval of time where Nifty got hammered back over 600 points to fall to a low of 24,210
Difference 644 points
Aug 2024:
1st Aug - The recovery was as swift as the blink of an eyelid with Nifty racing ahead to the 25,000 mark reaching a new high of 25,078
5th Aug - There was immediately a massive fall due to rising tensions in Japan on account of Yen carry trade making the index to tank over 1000 points to reach an intra-day low of 23,893
Difference 1185 points
Sep 2024:
27th Sep - Nifty again regained it's lost glory to seek newer pastures hitting the landmark of 26,277.35
After Sep 2024, Nifty has been on a one way downside movement with the falls extending intensely with first 26,000 being broken followed by 25,000, 24,000, 23,000 and within touching distance of breaking the 22,000 barrier as well in the 5 month period from Oct 2024 to Feb 2025.
Let's plot the downfall of Nifty every month beginning from Oct'24 and extending up to Feb'25 marking a record 5 continuous negative closing periods.
Sep'24 close: 25,810
Oct'24 close: 24,205 - Fall of 1605 points - 6.22%
Nov'24 close: 24,131 - Fall of 74 points - 0.03%
Dec'24 close: 23,644 - Fall of 487 points - 2.02%
Jan'25 close: 23,508 - Fall of 136 points - 0.06%
Feb'25 close: 22,124 - Fall of 1384 points - 5.89%
The total fall from lifetime high of 26,277 registered on 27th Sep 2024 to close of markets on 28th Feb 2025 where it ended at 22,124 happens to be a whopping 4,153 points which in percentage terms leads to a down tick of 15.80%.
Let's now look at the support levels for Nifty and which zones it needs to fiercely protect in order to not capsize much further and create further panic and roughening up investor sentiment.
-> First up is the psychological mark of 22,000. Nifty has hit a low of 22,004 in it's first session of March 2025 but just agonisingly managed to hold the fortress of 22,000 from being breached. This is however in grave threat and it looks like it's just a matter of time before this breaks.
-> Next up is the mark of 21,800. Incidentally 21,801.45 was the highest point reached by Nifty in the year 2023. It will strongly look towards holding that level and not breaking further to induce plenty of chaos in the system.
-> After that is the level of 21,281. Nifty hit an intra-day low of 21,281 on Jun 4th 2024 which was the day when the Lok Sabha election results were announced.
-> Closing on it's heels is the speckle of 21,137 (21,137.20) which happens to be the Nifty low in the entire year of 2024.
-> Again in nearby range happens to be the sacrosanct figure of 21,022 which would be a striking fall of 20% from the recent all time high of 26,277.35 putting the Nifty officially into bear territory.
-> Lastly in the series would be the barrier mark of 21,000 which is virtually on the same levels of the bear market territory. If 21,000 happens to be taken out there is no doubt hell will break loose and pandemonium will swing to the ultimatum inducing colossal levels of panic.
There is no hard and fast rule that Nifty cannot fall below 21,000. A 25% fall from the high can even take it below 20,000 levels making hell break loose big time. However it has to happen one by one and for now it's very essential that Nifty holds up and prevents itself from falling below the 21,000 figure. It does however look very bleak that Nifty will be able to regain it's lifetime high in the year 2025 going by the trends at play. Every year since the last many years Nifty has always bounced back to reach new highs. This time however it has it's back against the walls and almost needs to defy odds to go past the whistling number of 26,277.35 in 2025. It's going to be a roller coaster ride and surely it's going to be curious how the fortune swings. At the end of the day, markets are supreme and they will do it's thing.
