Following the global cues, the market is witnessing a bloodbath. It is making a straightforward fall on a steady basis. Today, the market fell nearly 350 points and closed around 22,900, below the 23,100 mark.
Today, the market opened nearly 50 points down. After that, it witnessed a drastic fall and reached around the 22,900 level within a couple of 15-minute candles. Following this, it moved choppily throughout the day and closed near the 22,900 level, marking a close below the key support level of 23,000. This level also aligned with the moving average, and the market closed below it as well.
Global market analysis
China backfire 34% tariffs
China recently announced a 34% tariff on U.S. oil products in response to U.S. tariffs. This move is likely to escalate the trade war between the two countries, especially as other nations are trying to strike deals with the U.S. to maintain business relations. In contrast, China has chosen a retaliatory approach. This is expected to further fuel tensions around the trade war.
Another important point is that the U.S. aims to boost domestic manufacturing. China, being the global manufacturing hub for many international companies, could face setbacks. Many companies manufacture their products in China and export them worldwide, including to the U.S. These new tariffs may hit those companies hard, potentially forcing them to relocate their manufacturing operations to the U.S. or other countries with lower tariffs.
Currently, China faces a 67% tariff rate. If such retaliation continues and the trade war intensifies, it could significantly harm China’s manufacturing sector.
Fed comment on tariffs
The Fed has recently made a statement regarding the global tariff war, acknowledging that it may impact the U.S. economy more severely than previously anticipated. Following this statement, there are growing speculations that Fed members expect a spike in inflation, along with a slowdown in U.S. economic growth—at least in the short term. This situation could turn negative, as tariffs are likely to have a larger impact than initially expected.
Nasdaq has entered a bear market, having fallen around 21% from its recent high. It made a peak of 22,222 in February, and recently closed near the 17,397 level—marking a decline of over 20% from the top, which technically confirms a bear phase.
On Friday, it witnessed a sharp fall of around 1,123.78 points on the NASDAQ, reflecting a decline of approximately 6.6%. Over the past two trading sessions, the NASDAQ has dropped more than 11%, highlighting increased volatility and bearish sentiment.
Domestic market analysis
Global trade war Impact on India
India is also going to be impacted by the global turmoil, although the effect may be relatively lesser compared to the global scale. Still, the impact is visible. Several sectors—such as Nifty Metal, Nifty Pharma, and Nifty IT—have seen significant declines from their recent highs. These sectors are showing a continued downtrend, indicating further potential downside.
The core concern is that these sectors are nearing critical support zones, and bears seem to be in strong control. This is creating uncertainty in the short-term outlook for the Nifty 50, especially as it continues to follow weak global cues.
Impact of the fed comment
Following the Fed’s recent statement regarding the U.S. economy, they anticipate a significant spike in inflation along with a potential recovery in growth. This creates a complicated situation, as it suggests that rate cuts may not happen as soon as previously expected. If rate cuts are delayed, it could strongly impact the Indian IT sector, which derives nearly 60% of its revenue from the U.S. market. As a result, the sector is likely to be directly affected, leading to further downside pressure. This is one of the key reasons why the Nifty and especially the Nifty IT index may continue to decline in the coming days.
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Gift nifty for tomorrow trade setup
Gift nifty is opening nearly 600 points down, reaching the 22,343 level and closing below 22,500. This marks a drastic fall, and it appears that the market is heading toward testing the 22,000 level. This decline is largely driven by global cues, with Asian markets also trading lower. All of this is setting up for a crucial Monday session, where the market direction will depend on how traders react to these developments.
FII and DII activity & option chain
FII and DII activity
FII activity has become a key concern for the Indian equity market, as they have been net sellers for five consecutive days. A major point of concern is that they have sold over ₹3,483.98 crore. FIIs have remained net sellers throughout the first week of April.
Adding to the concern, even DIIs turned net sellers yesterday, offloading ₹1,720.32 crore worth of equities. The combined selling pressure from both FIIs and DIIs led to a significant decline in the Nifty 50, which closed 345.65 points lower.
Option chain analysis for 07 April trade setup
As we are currently in an uncertain market environment, option writers are not very active in the nearby strike prices of the option chain. Put writers are notably absent, with the highest open interest seen at the 22,800 strikes, where there are 76,539 contracts—indicating a potential support level.
On the other hand, call writers are more active. The 23,000 strike has the highest open interest among nearby strikes, with 1,31,310 contracts, followed by 23,193,843 contracts at other key levels. This suggests that the 23,000 level may act as strong resistance.
Overall, open interest remains relatively low across strike prices, but current data shows that call writers are more dominant than put writers, which reflects a bearish sentiment in the market.
Nifty 50 prediction
At the moment, taking a trade is highly uncertain. Even with deep analysis, there’s still a chance of failure. No matter what tools you use—price action, indicators, Gann theory, Fibonacci, or any other method—the current panic in the market suggests that even solid analysis can go wrong. It’s becoming difficult to predict the market direction and key levels for the Nifty 50.
As we mentioned in our previous blog, the 23,000 level was identified as a very crucial support for Nifty 50. We also highlighted the role of a long-term moving average that had been providing consistent support. However, in Friday’s trading session, the market closed below both the 23,000 level and that moving average—signalling a breakdown.
As per gift nifty suggestion, the market may open near the 22,400 level, which calls for a cautious approach. We are in a wait-and-watch mode, observing how the candles form and how the trend unfolds. Looking ahead, if the market continues its downward move, we may retest the 22,000 level—a level that previously acted as a strong reversal zone. Alternatively, we might also witness a short-term upside bounce from these oversold levels.
Conclusion
We are currently in a phase of observation. The market is in a state of panic, and traditional tools like candlestick patterns, price action, or even advanced analysis might not be fully reliable—even if your analysis is strong. At this point, much depends on external factors, especially how former President Trump responds on the trade front.
If the U.S. builds positive relations and strikes meaningful trade deals with other major economies, we could see a strong upside swing. Right now, the market is in a bearish zone, with the Nasdaq also confirming a bear phase. However, any positive news regarding a trade deal with a major global economy could trigger a sharp reversal.
For now, the best approach is to stay cautious, observe the market closely, and continue refining our analysis as the situation develops.
