The Nifty 50 index on Friday seems set to complete its third-longest correction in terms of the number of trading sessions spent below its 200-day moving average (200-DMA), even as the extent of the decline remains relatively shallow compared with previous prolonged market downturns. An analysis of historical data shows that the benchmark index has now spent 160 trading sessions below its long-term average, marking its longest such stretch since January 2012. The Nifty has been quoting below its 200-DMA since February 27, 2026. However, unlike previous extended corrections, the current downturn has seen a relatively limited gap between the index and its 200-DMA. At current levels, the Nifty quotes 6 per cent below its 200-DMA, which stands at 24,136.
The 200-DMA is a widely tracked technical indicator that helps investors gauge the market trend. An index trading below this level is generally seen as being in a weaker trend and vice-versa. The markets, analysts said, have been impacted by the ongoing geopolitical conflict in West Asia, the exodus of foreign institutional investors (FIIs) from Indian equities, rising crude prices and firming bond yields. That apart, investors have rotated out of large-caps into smaller peers and into the primary markets. The broader market resilience in recent months has been more a function of liquidity than earnings, said V K Vijayakumar, Chief Investment Strategist, Geojit Investments. ALSO READ: Nifty PSU vs Private Bank: Which banking index looks stronger on charts? “Strong external headwinds in the form of elevated crude prices and high US bond yields are emboldening bears to build short positions. This is the reason why the market is declining even on days of positive FII and DII buying,” he said. Meanwhile, historical data show that the Nifty has spent at least 150 trading sessions below its 200-DMA on six occasions. The longest such stretch lasted 227 trading sessions, between May 2008 and April 2009, during the global financial crisis triggered by the US subprime mortgage meltdown. The second-longest correction lasted 188 trading sessions on two occasions — between May 2011 and January 2012, and between May and December 2001.
Shallow correction
Despite its prolonged duration, the current correction stands out for the relatively small magnitude of the Nifty's decline below its long-term moving average. During the ongoing phase, the index's maximum deficit relative to its 200-DMA has been 11.5 per cent, while its average shortfall has stood at 4.5 per cent.
In comparison, among the five other instances when the Nifty spent more than 150 trading sessions below its 200-DMA, the smallest maximum shortfall was 12.6 per cent, recorded during the August 2015-April 2016 correction. The largest was 45.3 per cent during the 2008-09 global financial crisis. The difference is even more pronounced when the duration of deeper declines is considered. During the 2008-09 correction, the Nifty spent 199 of the 227 trading sessions—nearly 88 per cent of the period—at least 10 per cent below its 200-DMA. ALSO READ: NSE, BSE to hold Diwali Muhurat Trading on Nov 8; check timings Similarly, during the 2001 and 1998-99 corrections, the index remained more than 10 per cent below its long-term average for 140 sessions and 123 sessions, respectively, accounting for 74.5 per cent and 78.3 per cent of the respective periods. By contrast, during the current correction, the Nifty has recorded only three trading sessions with a deficit of more than 10 per cent relative to its 200-DMA. Technical view on Nifty From a technical standpoint, the Nifty, said Shrikant Chouhan, Head Equity Research, Kotak Neo, has formed a bearish candle on the daily chart, while the intraday lower-top formation broadly indicates a negative setup. "The 20-day SMA (Simple Moving Average), along with 22,800 and 22,750, would act as key support zones. If it sustains above these, the index could move towards 22,950-23,000. Conversely, selling pressure is likely to increase below 22,750, which could push it towards the 22,650-22,500 zone," he said. Ponmudi R, CEO of Enrich Money, a SEBI-registered online trading and wealth-tech firm, too, remains cautious on the road ahead for the markets and suggests that the Nifty 50 remains under pressure amid persistent selling.
The index, he said, maintains a cautious-to-bearish bias, with the near-term direction likely to depend on its ability to sustain above the 22,800 resistance zone while holding the immediate support around 22,600–22,550.
"On the downside, the 22,600–22,550 range serves as the immediate support zone. A sustained breakdown below 22,500 could intensify selling pressure and drag the index towards the 22,300–22,200 zone," he said.