Sensex, Nifty Trading Outlook: Key Resistance at 25K Call, Support at 24,500 Put; PCR Indicates Bearish Trends

The Indian equity market is expected to open on a muted note on Monday, tracking mixed global market signals and continued caution among investors. Early trends on the Gift Nifty suggest a flat-to-negative start, with the Nifty futures trading around the 24,832 level-down nearly 18 points from the previous close.

Sensex, Nifty Outlook Today, July 28

This tepid opening follows a sharp sell-off on Friday, when benchmark indices closed at a one-month low. The BSE Sensex tumbled 721.08 points, or 0.88%, to settle at 81,463.09, while the Nifty 50 declined by 225.10 points, or 0.90%, ending the session at 24,837.00. The broader market also felt the heat, with the Nifty Midcap100 and Smallcap100 falling 1.6% and 2.2%, respectively.

Nifty 50 Technical Trends

The Nifty 50 index broke below its key support level of 24,880 on Friday and formed a long bearish candle on the daily chart, indicating renewed weakness in market sentiment. Weekly data showed a 0.53% decline for the index, reflecting a broader downtrend.

Options data reveals that the 25,000 strike carries the highest Call open interest at 1.45 crore contracts, making it a major resistance level in the near term. This is followed by the 25,200 and 25,500 strikes. Fresh Call writing at these levels-especially 95.48 lakh contracts added at 25,000-further underscores the resistance zone.

On the Put side, the highest open interest was observed at the 24,500 strike, with 63.38 lakh contracts, indicating strong support. Significant Put writing was also noted at the 24,700 and 24,850 strikes, adding 29.51 lakh and 16.08 lakh contracts, respectively.

The Nifty Put-Call Ratio (PCR) fell to 0.7 on July 25, its lowest since early June, suggesting a bearish sentiment among market participants. Typically, a PCR below 0.7 reflects higher Call writing compared to Put writing, signaling a cautious or negative market outlook.

Volatility and Sentiment

The India VIX, which measures expected volatility in the market, rose by 5.15% to 11.28 on Friday. This marks a continuation of its upward trajectory and indicates increased investor nervousness. Rising volatility often precedes market corrections or wide price swings.

According to Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services Ltd., Friday's decline was driven largely by a sharp fall in financial stocks like Bajaj Finance, due to concerns over asset quality. Global trade uncertainties, stalled India-US trade negotiations, and persistent foreign institutional investor (FII) selling added to the negative momentum.

"Global uncertainties, lack of progress in India-US trade negotiations, and continuous selling by foreign investors further contributed to the market's negative performance. The broader market underperformed significantly with Nifty Midcap100 and Smallcap100 falling by 1.6% and 2.2% respectively. Pharma and Healthcare indices showed resilience, closing higher by 0.6-0.7% each, amid a broad based sectoral sell-off," the expert said.

India-UK FTA

Despite overall weakness, there were some positive developments. The India-UK Free Trade Agreement (FTA), which aims to double bilateral trade to $120 billion by 2030, was formally signed over the weekend. This could benefit long-term trade and economic ties between the two countries. Meanwhile, the European Central Bank kept interest rates unchanged but flagged downside risks to growth in the Eurozone, adding to global caution.

Key Earnings Ahead

Traders and investors will be closely watching Q1FY26 earnings reports from key companies which are expected to be released today. These results could provide fresh direction to the market.

With technical indicators pointing to weakness and sentiment weighed down by global uncertainties and FII outflows, Indian markets are likely to remain in consolidation mode in the near term. Resistance is seen in the 25,000-25,200 range, while support lies between 24,500 and 24,700. Until stronger domestic earnings or global cues emerge, market participants are likely to adopt a cautious stance.

"Overall, we expect market to remain in consolidation mode amid continued uncertainty around India-US trade deal, a mixed Q1FY26 earnings season so far and intensifying FII outflows. Key results over the weekend include Kotak Mahindra bank, Macrotech Developers, CDSL amongst others," said Mr. Khemka.

Disclaimer

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