CLSA Sees Nifty Approaching 2025 Low; Key Support Levels Noted
CLSA forecasts Nifty may test 2025 low level.
Global brokerage CLSA has issued a bearish outlook on the Nifty 50 index, forecasting it could slide toward its 2025 low of 22,161 amid escalating geopolitical tensions and market volatility. The benchmark index, which closed at 23,002 on Thursday after a sharp 776-point or 3.26% drop—its steepest since the Covid crash—now faces critical support at 23,000, with analysts eyeing further downside if breached. This warning comes as crude oil prices swung wildly from $119 to $107 per barrel, reflecting Iran conflict spillovers.
CLSA's projection highlights weakening global cues, including Middle East disruptions hammering energy stocks and foreign investor outflows from emerging markets like India. The Nifty's 52-week range spans a high of 26,373 to that 22,161 trough last year, underscoring vulnerability after recent peaks above 24,000 eroded by war jitters. Options data reinforces 23,000 as pivotal put support, while 24,000 calls signal overhead resistance.
GIFT Nifty futures hinted at a mildly positive Friday open above 23,200, buoyed by oil's retreat, yet CLSA urges caution with the weekly 200 EMA near 22,000 as next defense. A close below 23,000 could accelerate selling toward 22,500-22,161, driven by risk-off sentiment in IT, banking, and oil-linked sectors. Bank Nifty mirrors this, testing 49,000 after Thursday's rout.
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Broader context ties to regional instability: Iranian strikes on Gulf energy hubs like Qatar's Ras Laffan LNG and Saudi's Yanbu refinery spiked volatility, indirectly pressuring India's import bill and rupee. FIIs sold over ₹5,000 crore this week, amplifying domestic pain despite DII buying. CLSA recommends hedging via puts at 23,000 strikes for March expiry.
Market watchers note resilience if oil stabilizes under $110, potentially lifting sentiment for a 23,500 rebound. However, sustained conflict risks—echoing Netanyahu's claims of crippling Iran's military—could validate CLSA's target, with 22,161 aligning as psychological and technical floor from 2025 bear phase.
Investors should monitor US futures, dollar-rupee at 86.50, and Q4 earnings kickoff next week. CLSA's call, amid Nifty's 10% YTD correction, signals defensive positioning over aggressive bets until clarity emerges on global flashpoints.
