Nifty Dips 2.5% After Record High; Analyst Sudeep Shah Eyes Key Breakout Level

Indian markets experienced a volatile week, ultimately closing in the red due to a mix of domestic and global factors. Investor caution prevailed for most of the week, intensifying with increased selling pressure. A late-session recovery helped to mitigate some losses.

Market confidence was further dampened by persistent outflows of foreign funds and a weakening rupee. Consequently, the Nifty 50 index declined by 139 points to close at 26,046, while the Sensex fell 445 points, settling at 85,268.

Following these market movements, Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, discussed his outlook for the Nifty 50 and Bank Nifty with ET Markets, also providing an index strategy for the week ahead. Here are edited excerpts from that conversation:

*Despite a sharp recovery on Friday fueled by US Fed rate cut hopes, the Nifty still ended the week lower. Given this consolidation after recent highs, what's your outlook?*

The Nifty began December with strong upward momentum, reaching a new all-time high of 26,325 on the first trading day. That said, the reality is a bit more complicated. the market then experienced a pullback. Since August, the Nifty has shown a consistent pattern of shallow corrections, typically not exceeding 3.5% and lasting approximately 5 to 10 trading sessions. This predictable behavior has characterized the rally, leading traders to anticipate a continuation of this pattern.