Trade Setup For Oct. 1: Nifty 50 Sees Next Support At 25,500 Amid Market's Bearish Turn

The next support level for NSE Nifty 50, which witnessed a sharp selloff on Monday, will be at the 25,500 level, according to analysts. They also expect 26,000 to be an immediate hurdle for the index.

Sentiment on the Nifty 50 has shifted towards the bearish side after a gap-down opening. The index has created a strong bearish candle on the daily chart, indicating further weakness in the markets from the current levels, said Aditya Gaggar, director of Progressive Share Brokers Pvt.

He also pointed out that Nifty broke the psychological support of 26,000 and "kept on violating its small support points" to end the session at 25,810.85.

According to Shrikant Chouhan, head of equity research at Kotak Securities,"The current market texture is weak and volatile for the traders now. As long as it is trading below 26,000, the weak sentiment is likely to continue."

He also added that if the market falls below 26,000, then it could slip to 25,700–25,600. On the flip side, if it is above 25,850, it would see a bull rally till 25,900-25,935.

Looking at the current market trend, Hrishikesh Yedve, assistant vice president of technical and derivatives research at Asit C. Mehta Investment Intermediates Ltd., suggests a "short-term" sell-on-rise approach.

Bank Nifty also saw a negative open and remained under pressure through the day. Analysts believe that with the index forming a bearish candle, it will see weakness in the next trading session.

Yedve sees 52,720 as the next support level for Bank Nifty, with any bounce towards 53,300–53,350 to be seen as an opportunity for profit booking.

Overseas investors turned remained sellers of Indian equities on Monday after a session of buying. Foreign portfolio investors offloaded stocks worth Rs 9,791.93 crore, according to provisional data from the National Stock Exchange.

Domestic institutional investors stayed net buyers for the sixth day and purchased equities worth Rs 6,645.80 crore, the NSE data showed.

India's benchmark stock indices experienced their worst day in almost two months on Monday, driven by significant declines in major players like Reliance Industries Ltd. and ICICI Bank Ltd., amid rising geopolitical tensions in the Middle East.

The NSE Nifty 50 closed down 356.70 points, or 1.36%, at 25,822.25, while the BSE Sensex fell 1,272.07 points, or 1.49%, to finish at 84,299.78.

The Indian rupee closed weaker on Monday, pressured by a rise in the dollar index and Brent crude oil prices.

The currency depreciated 10 paise to close at Rs 83.80 against the US dollar after opening at Rs 83.72. It had closed at Rs 83.70 on Friday, according to Bloomberg.