JM Financial’s Rahul Sharma flagged a looming risk for the Nifty after a sharp sell‑off triggered by insurance‑sector jitters. Oil prices have already crossed the $100 mark, and any uptick could force the index lower— a scenario Sharma says would see the Nifty slip past the 23,070 support.
Sharma points out that the 23,070 level is a psychological threshold. If the market breaks below it, the next logical target is around 22,500, and a further drop could echo the 2008 slide, which saw a 22% decline over a similar stretch.
Sector‑wise, small‑ and midcaps are now dragging the broader market, a departure from their earlier resilience. Pharma remains the sole bright spot, with Divi’s Laboratories and Laurus Labs showing buying interest even amid the downturn. Eternal, the food‑delivery firm, keeps forming higher highs, and Sharma projects a 400‑rupee target by year‑end.
In banking and metals, Sharma recommends Tata Steel and RBL Bank. Tata Steel trades in a 180–190 range and could rebound to 210 with a favourable risk‑reward profile; a stop‑loss at 182 is advised. RBL Bank, near 400, has a target of 475 for positional traders.
Looking ahead, the Q2 earnings season begins in mid‑October. A meaningful earnings surprise could lift sentiment, but until then, Sharma expects a "sell‑on‑rise" market where rallies are used to cut positions. The 61% Fibonacci retracement at 24,200 remains a distant upside for the Nifty.