Investors are worried about the recent drop in the Nifty 50 and BSE Sensex, particularly as the index has dropped to a noteworthy level. Given that it is the worst decline in Indian exchanges since the COVID-19-led meltdown, the present decline seems more serious. Investors are curious as to whether this is really a brief correction or the start of a longer decline. Here are the specifics, which include analyst forecasts, potential catalysts for the stock market next week, and more.

Prospects for the Stock Market Next Week
Religare Broking Limited’s SVP of research, Ajit Mishra, stated: “Markets continued to decline for the fourth week in a row, falling more than 2.5 percent. After a muted start, continued withdrawals of foreign funds and disappointing earnings announcements were the key causes of the market’s bearish mood that persisted throughout the week. Consequently, the Nifty and Sensex benchmark indexes fell close to their weekly lows of 24,180.80 and 79,402.29, respectively.

He went on to say, “In terms of the sector, IT held constant, while real estate, metals, and automobiles had significant drops. The steep decline in wider indexes, which fell between 5.75 and 6.45 percent after weeks of relative outperformance, has been a big worry for traders.

“Two main concerns—wweak earnings and selling foreign institutional investors (FIIs) — are expected to continue influencing sentiment into the coming week,” Ajit Mishra said. Important companies including Adani Ports, Bharti Airtel, Cipla, Dabur, and LT will also make their results announcements, which will be monitored carefully. Additionally, it is anticipated that volatility will rise when October futures contracts expire, and car sales data will provide additional indicators as the month progresses.

“The performance of the U.S. market will continue to be significant despite the lack of alignment with international markets, especially given the ongoing speculation about rate reduction and the impending presidential election. He said that the S&P 500 and Nasdaq Composite had mixed patterns, finishing flat to slightly down, while the Dow Jones Industrial Average (DJIA) fell by more than 2.5% during the previous week.

“After dropping for four weeks, the Nifty index is getting close to support around the 24,000 mark. If this is broken, sentiment may deteriorate even further, and the index may go toward the 200-day exponential moving average (DEMA), which is located at 23,450. Resistance may initially appear at the 100 DEMA close to 24,500 and then at 24,850 on a rebound effort. Oversold circumstances might lead to selective recoveries even as the majority of sectors—aside from IT—remain under pressure. The “sell on rise” approach should be maintained, and traders should be particularly cautious when dealing with midcap and smallcap equities. With a lengthy investing horizon and amid the current gloom, investors can think about collecting high-quality equities gradually, according to Ajit Mishra.