Key Takeaways
- • The Nifty 50 lost its key 22,500 support level on an intraday basis on October 8, extending losses after the Reserve Bank of India raised its repo rate by 25 basis points to 5.5%.
- • The RBI's hike was its first in nearly four years, taken amid mounting inflation and strong economic growth.
- • Bajaj Broking's Pabitro Mukherjee identifies 22,400-22,200 as the key downside support zone, with a close below the April 2026 low of 22,182 signaling a deeper decline.
- • Brent crude rose 2.2% to $102.5 a barrel on Middle East supply concerns, including attacks on Gulf shipping and the Strait of Hormuz.
- • An analyst expects foreign institutional investors (FIIs) to keep selling into rallies while the US 10-year Treasury yield holds above 5.3%, pressuring large-cap stocks.
Summary
The Nifty 50 lost its key 22,500 support level on an intraday basis on October 8, extending the previous session's losses. Moneycontrol reported that the decline followed a hawkish monetary decision by the Reserve Bank of India, which raised its benchmark repo rate by 25 basis points to 5.5%. It was the central bank's first rate increase in nearly four years, undertaken as inflation concerns mounted alongside robust economic growth. Benchmark indices had earlier snapped a two-session winning run after the announcement.
Rising energy prices added to inflationary pressure. Brent crude gained 2.2% to $102.5 a barrel, driven by persistent worries over Middle East supply after increased attacks on shipping in the Gulf and the Strait of Hormuz.
Global rates and capital flows are also weighing on the market. According to an analyst cited by Moneycontrol, with the US 10-year bond yield hovering above 5.3%, foreign institutional investors are expected to continue selling into every rally, which will keep pressure on Nifty large-cap stocks for some time.
On technical levels, Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, said the key downside support zone lies between 22,400 and 22,200. This band reflects the confluence of the April 2026 low, the 200-week exponential moving average and a long-term rising trendline. He said a breach below the April low of 22,182 would signal a further extension of the decline. For a meaningful trend reversal, he said, the index would need to form a sustained higher-high, higher-low structure on the daily chart and reclaim the 23,000-23,100 zone, which marks the confluence of the prior week's high and a recent breakdown area.
Rising energy prices added to inflationary pressure. Brent crude gained 2.2% to $102.5 a barrel, driven by persistent worries over Middle East supply after increased attacks on shipping in the Gulf and the Strait of Hormuz.
Global rates and capital flows are also weighing on the market. According to an analyst cited by Moneycontrol, with the US 10-year bond yield hovering above 5.3%, foreign institutional investors are expected to continue selling into every rally, which will keep pressure on Nifty large-cap stocks for some time.
On technical levels, Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, said the key downside support zone lies between 22,400 and 22,200. This band reflects the confluence of the April 2026 low, the 200-week exponential moving average and a long-term rising trendline. He said a breach below the April low of 22,182 would signal a further extension of the decline. For a meaningful trend reversal, he said, the index would need to form a sustained higher-high, higher-low structure on the daily chart and reclaim the 23,000-23,100 zone, which marks the confluence of the prior week's high and a recent breakdown area.
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