Has the Indian stock market bottomed out after reaching six-month low or more downside left? What experts suggest

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The domestic benchmark indices staged a rebound on Monday, 5 October, after the Nifty 50 posted its longest weekly losing streak in 25 years, with softer crude oil prices and easing concerns over aggressive US monetary tightening providing some relief to investors.
The Nifty 50 rose 0.60% to 22,555.75, while the Sensex gained 0.66% to 72,382.47. The recovery came after the benchmark indices had declined for eight consecutive weeks, pressured by sustained foreign selling, elevated crude oil prices and a sharp rise in global bond yields.
Market sentiment improved after softer-than-expected US jobs data reduced expectations of a Federal Reserve rate hike later this month. A decline in crude prices also offered some relief to emerging-market equities.
However, experts remain divided on whether Monday's rebound marks the beginning of a sustained recovery or is merely a short-term bounce from oversold levels.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said valuations have become attractive and the downside appears limited from a fundamental perspective. However, he cautioned that elevated crude prices and US bond yields continue to pose significant risks.
“Fundamentally, the market appears attractive with limited downside. But Brent crude above $100 and the US bond yields remaining elevated are strong headwinds,” Vijayakumar said.
He noted that the US 10-year Treasury yield, hovering around 5.25%, could continue to discourage foreign portfolio investors from returning to Indian equities.
“With the US 10-year yield hovering at 5.25%, there is no incentive for FIIs to turn buyers in India. This will continue to be a strong headwind for the market,” he added.
From a technical perspective, Monday's recovery has improved the near-term setup, although the index still needs to cross key resistance levels before a broader recovery can be confirmed.
Rajesh Bhosale, Technical Analyst at My Advisor Alpha, said the positive momentum was largely supported by oversold conditions and the Nifty 50's proximity to its long-term support zone around the 200-week moving average.
The RSI is also showing positive divergence in the oversold zone, while buying interest has emerged on intraday declines, Bhosale said. He expects the ongoing bounce to extend further, but highlighted 22,800 as the key hurdle.
“A sustained move above this level could trigger a broader-based recovery,” Bhosale said, adding that 22,200 remains an immediate support level.
Hitesh Rathi, Technical Analyst - Equity & Derivatives at Angel One, said the market is approaching a support zone that has held on several occasions over the past two years.
According to Rathi, the rising trendline currently lies around the 22,200–22,000 zone. Although the Nifty 50 has closed below this trendline, he said a decisive breakdown would be needed to confirm further deterioration.
The support zone also gains importance on the Point & Figure charts. On the 1% P&F chart, the zone coincides with the lows of a bullish anchor column that has remained active since early 2025.
“A break below the lows of this Anchor Column, around the 22,250 band, would invalidate a major bullish setup and mark the first such breakdown since the lows recorded during the COVID period,” Rathi said.
Given the index's proximity to this support zone and oversold readings across technical and market breadth indicators, Rathi expects a possibility of a bounce in the coming sessions.
Ruchit Jain, Head - Equity Technical Research, Wealth Management at Motilal Oswal Financial Services, said the Nifty has reached the March swing-low support around 22,200, while RSI readings have entered oversold territory.
This creates room for a near-term pullback, although Jain cautioned against concluding that the market has already formed a bottom.
“Post eight straight weeks of losses, Nifty 50 has reached the March swing low support around 22,200, and the RSI readings are oversold. Thus, a pullback move in the index is possible in the near term to relieve the oversold setups,” Jain said.
However, he pointed out that the key factors behind the recent sell-off — rising crude oil prices, elevated bond yields and FII selling — have not yet reversed.
“Hence, the initial upmove should be seen as a pullback move only,” Jain said, adding that investors should wait for the index to cross important hurdles with healthy market breadth.
He sees immediate resistance for the Nifty 50 at 22,800, followed by 23,150.
Sunny Agrawal, Deputy Vice President - Fundamental Research at SBI Securities, believes much of the negative sentiment is already reflected in current prices and valuations have become more comfortable.
“We believe that most of the negatives are in the price and valuations have turned comfortable,” Agrawal said.
At around 22,400, the Nifty 50 is trading at about 18x P/E, which is below its long-period average, he added.
Agrawal believes a reversal in the global AI trade, coupled with a cooling-off in crude oil prices, could support a recovery in Indian equities. However, rather than taking a broad market approach, he recommends focusing on individual stocks.
“Approach should be stock specific with focus on bottoms-up ideas,” he said.
The sharp rebound on Monday has improved sentiment, but experts largely remain cautious about calling a definitive market bottom.
Technically, 22,200–22,000 has emerged as a crucial support zone, while 22,800 is the first major hurdle for the Nifty 50. A sustained move above this level, accompanied by healthy market breadth, could strengthen the case for a broader recovery.
However, elevated crude prices, US bond yields and continued FII selling remain key headwinds. For now, experts suggest that Monday's move may be treated as a relief rally or pullback rather than confirmation of a durable bottom, with stock-specific opportunities emerging as valuations become more attractive.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
Dhanya Nagasundaram works as a Content Producer at LiveMint, specializing in news related to financial markets, stocks, and business. With over eight years of experience in journalism and content creation, she has honed her skills in data-driven reporting and market analysis. Her focus is on monitoring stock trends, initial public offerings (IPOs), corporate news, policy shifts, and larger economic trends that affect investors and market players. <br><br> At LiveMint, Dhanya consistently writes and produces articles that make complex financial topics accessible to readers. She keeps a close eye on equity markets, commodities, and macroeconomic indicators, assisting audiences in comprehending how global and domestic events influence investment perspectives. Her stories frequently underscore emerging trends within sectors, the IPO market, company earnings results, and market strategies pertinent to both retail and institutional investors. <br><br> Before her tenure at LiveMint, Dhanya accumulated a wealth of professional experience at various companies, including MintGenie, Informist, Cogenics, Chary Publications, KPMG, and the Royal Bank of Scotland. These positions allowed her to establish a solid foundation in financial research, reporting, and content creation. <br><br> Throughout her career, she has explored numerous subjects such as trading strategies, commodities, IPOs, wealth generation, corporate profits, and macroeconomic indicators. Her background in both financial journalism and corporate settings has given her the ability to tackle stories with analytical rigor while ensuring clarity for her audience. Through her contributions, Dhanya strives to deliver insightful, trustworthy, and investor-centric financial content.
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