Markets stay in a downtrend; sugar and pharma offer pockets of resilience: Rohit Srivastava

Indian equity markets continue to remain under pressure as benchmark indices struggle to reclaim crucial resistance levels, suggesting that the broader trend is still tilted to the downside. Market experts believe that unless key technical thresholds are decisively crossed, the path of least resistance for the indices could remain lower in the near term.

According to Rohit Srivastava, Founder, Strike Money Analytics & Indiacharts the technical structure of the market indicates that the current decline is still part of a broader downtrend. “So, Nifty remains below 24,300, that keeps us in a continued downtrend which we define as a series of lower lows and lower highs. Now that means that we should probably attempt to retest the low that we made at 23,700 and if that breaks, then maybe head towards 23,300, so that is going to be the outlook on Nifty.”

The weakness is not limited to the headline index alone. The banking gauge is also facing similar technical challenges. “On Bank Nifty similarly staying below 57,100 we should be testing the lows again, 55,200 and if that breaks then probably head towards 54,200 or so. So, we do look at this as an ongoing downtrend that has not reversed as yet.”

With the broader market still searching for stability, traders are increasingly cautious about deploying fresh capital. However, selective opportunities are emerging in a few pockets where sector-specific factors are providing some support.

Highlighting areas that could show relative resilience, Srivastava pointed to the sugar sector, particularly companies linked to ethanol production. “So, one segment is in the sugar space because sugar stocks especially those which have exposure to ethanol they may benefit from what is becoming an oil crisis. So, you are seeing those stocks hold up a little better than others, so that is one area to consider if you are looking at near-term.”

Defensive sectors are also attracting attention as investors look for stability during volatile phases. “Another could be pure defensive pharmaceutical sector. So, pharma is something that you always need and therefore it acts as a defensive bet during difficult markets.”
Interestingly, he noted that another traditional defensive segment has not been providing the usual cushion. “We still do not think FMCG because that is second alternate when people think of defensive markets simply because they have been very-very weak and have been selling off from extreme valuation. So FMCG is not providing the same kind of hedge, but pharma may be better and sugar like I said relates more with the ongoing crisis.”For now, market participants appear to be navigating a phase where caution outweighs aggression. Unless key resistance levels are reclaimed, traders may continue to focus on selective sectors rather than broad-based market exposure.