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Market Retreat Amid Weak Sectoral Performance

By Mandar in Indian Market Insights —

Market Downturn on August 28, 2025

Indian markets experienced a significant correction on August 28, 2025, with benchmark indices closing sharply lower.

The Nifty dropped 256 points, closing below the critical 24,850 support, while the Sensex fell 849 points, indicating broad market weakness.

The market opened with a gap down and witnessed increased selling pressure, as indicated by a long bearish candle on daily charts, reflecting negative market sentiment.

Technical indicators suggest a lower top formation on intraday charts, further confirming bearish momentum.

Sectoral Performance

Overall, sectoral performance was weak, with Capital Markets, Defense, and Real Estate sectors declining significantly.

The FMCG sector showed resilience, rising nearly 1%, amidst the downturn.

The IT and Realty sectors also displayed weakness, while the Insurance sector showed potential to outperform.

Impactful News and Events

  • TPG Asia's complete exit from Sai Life Sciences by selling its 14.72% stake signaled cautious investment behavior in the pharma sector.
  • Domestic air traffic data showed a 2.9% year-over-year decline in July, impacting airline stocks and contributing to the subdued sentiment.

Key Technical Levels and Resistance

Key technical levels to watch:

  • Nifty at 24,850 support.
  • Lower top formations in intraday charts, acting as critical resistance.

Failure to hold these levels may lead to further declines.

Recommendations for Traders and Investors

  • Monitor Nifty at 24,850 support and the Sensex's key levels for signs of stabilization before buying.
  • Consider defensive sectors like FMCG and Insurance, which show relative strength.
  • Exercise caution in Capital Markets, Defense, and Real Estate due to sharp declines.
  • Watch for recovery signals in the IT and Realty sectors before investing.
  • Keep an eye on major corporate actions and macroeconomic data that influence market sentiment.

This cautious approach, supported by technical indicators and sectoral performance, suggests a wait-and-watch strategy in the near term amid prevailing negative market momentum.