1st September Market Report

Market Volatility Signals Extreme Fear

Monday, Sep 1, 2025 – Fear & Greed Index Plunges to 24.85

Quick Market Snapshot

• Market Sentiment: Fear & Greed Index at 24.85 (Extreme Fear) – down from 43.09 last week
• Key Theme: Markets face global headwinds as tariff concerns and weak Asian performance weigh on sentiment
• Major Movers: FMCG leads gains (+0.95%), while Financial Services face heavy selling (-3.70%)

---

Market Sentiment & Overview

Extreme Fear Grips Markets as Multiple Headwinds Converge

The Fear & Greed Index has plummeted to 24.85, marking a significant shift from last week’s 43.09 reading. This drop into “Extreme Fear” territory reflects mounting concerns about global trade tensions and their potential inflationary impact. According to traditional contrarian indicators, extreme fear levels often present buying opportunities for long-term investors, though the sustainability of any bounce remains questionable given current macroeconomic uncertainties.

Key Market-Moving Events:

• US tariff ruling concerns weigh on Asian markets
• India’s fiscal deficit nearly doubles to ₹4.68 lakh crore
• Strong Q1FY26 GDP growth of 7.8% provides some optimism
• Rupee hits record low against USD

The current market psychology shows classic signs of risk-aversion, with investors fleeing to defensive sectors while cyclical stocks bear the brunt of selling pressure.

---

Indian Markets Deep Dive

Nifty 50 Technical Breakdown Continues

As of market close on August 30, 2025:

• Nifty 50: 24,426.85 (-0.30%, -74.05 points)
• Sensex: 79,809.65 (-0.34%, -270.92 points)
• Bank Nifty: 53,655.65 (-0.31%, -164.70 points)

The Nifty 50 has formed its third consecutive bearish session, losing 1.8% for the week. Technical indicators are flashing warning signs:

Critical Technical Levels:

• Trading below 20, 50, and 100-day EMAs
• RSI at 39.14 with negative crossover
• MACD in bearish crossover
• Key support: 24,400 zone
• Resistance: 24,600-25,000

Sectoral Performance Analysis: Top gainers: Nifty FMCG (+0.95%), Nifty Media (+0.35%), Nifty Consumer Durables (+0.15%) Worst performers: Nifty Financial Services (-3.70%), Nifty Realty (-4.72%), Nifty PSU Bank (-4.89%)

The defensive rotation is evident, with FMCG and consumer staples attracting buying interest while financials face sustained pressure.

FII/DII Flow Dynamics:

• FII net selling: ₹53,341.9 crore (last 30 days)
• DII net buying: ₹1,03,030.5 crore (last 30 days)
• Clear divergence shows domestic institutions supporting markets against foreign outflows

Bank Nifty in Critical Zone: At 53,655, Bank Nifty sits just 80 points above its 200-day EMA (53,572) and 235 points from key Fibonacci support at 53,421. RSI at 27.45 indicates oversold conditions, but momentum remains negative.

---

Global Markets Roundup

Asian Markets Lead Global Decline

Current session data as of 7:20 AM IST:

Asian Performance:

• Nikkei 225: 42,126.56 (-1.39%, -591.91)
• Hang Seng: 25,503.62 (+1.70%, +426.00) – notable outperformer
• KOSPI: 3,175.56 (-0.33%, -10.45)

US Markets (Previous Close):

• Dow Jones: 45,544.88 (-0.20%, -92.02)
• S&P 500: 6,460.26 (-0.64%, -41.60)
• Nasdaq: 21,455.55 (-1.15%, -249.61)

European Markets:

• DAX: 23,902.21 (-0.57%, -137.71)
• FTSE 100: 9,187.34 (-0.32%, -29.48)
• CAC 40: 7,703.90 (-0.76%, -58.70)

The broad-based decline across global markets reflects concerns about trade policy impacts on economic growth. Hang Seng’s outperformance suggests some optimism around China-related developments following PM Modi’s meeting with President Xi.

---

Commodities & Currency Update

Crude Oil Under Pressure:

• Brent: $67.37 per barrel
• WTI: $63.90 per barrel
• Output and demand concerns outweigh supply disruption fears

Currency Markets:

• USD/INR: 88.19 (+0.05%, +0.04) – near record highs
• Rupee hit intraday record low of 88.31, closing at 88.21
• RBI intervention likely if levels breach 88.50 decisively

Key Commodity Trends:

• Energy sector weakness reflects global growth concerns
• Industrial metals under pressure from China slowdown fears
• Gold likely to benefit from risk-off sentiment

---

Corporate Actions & IPO Updates

Major Corporate Developments:

Power Sector Activity:

• Torrent Power secures 1,600 MW coal plant project in MP
• Adani Power wins 800 MW thermal project (₹5.838/kWh tariff)
• Gujarat Industries Power gets 700-750 MW lignite plant approval

Upcoming IPOs:

• Tata Capital: $2 billion IPO in week of Sept 22
• Reliance Jio: Record IPO targeted for H1 2026 at $154 billion valuation

Stock-Specific News:

• Ola Electric gains 14% on PLI approval for Gen 3 scooters
• RBL Bank approved for ₹3,500 crore QIP fundraising
• Multiple regulatory fines imposed across sectors

---

Pine Script Trading Insights

For Pine Script Developers – Key Technical Setups:

Nifty 50 Algorithm Signals:

// Current setup shows classic bearish momentum

// RSI < 40 with negative divergence

// MACD histogram weakening

// Price below all major EMAs except 200-day

Actionable Levels for Automated Strategies:

• Breakdown Alert: 24,400 (daily close basis)
• Bounce Levels: 24,300, 24,196 (Fibonacci supports)
• Resistance: 24,600, 24,700 for any relief rally

Options Data Insights:

• Put-Call Ratio: 0.71 (bearish sentiment)
• High put OI at 24,400 and 24,300 strikes
• Call writing evident at 24,600+ levels

Bank Nifty Strategy Setup: Critical for algo traders – Bank Nifty approaching make-or-break levels. A break below 53,400 could trigger algorithmic selling toward 52,800-53,000 zone.

---

Week Ahead & Key Catalysts

Economic Calendar Highlights:

• India: Manufacturing PMI, Auto sales data
• US: ISM Manufacturing, Job openings (markets closed today for Labor Day)
• China: Caixin Manufacturing PMI
• Global: Central bank policy communications

Technical Outlook:

• Nifty needs to reclaim 24,600 to negate immediate bearish setup
• VIX at 11.75 suggests complacency despite fear indicators
• Sectoral rotation toward defensives likely to continue

Risk Factors:

• Further rupee weakness beyond 88.50
• Sustained FII selling pressure
• Global recession fears if tariff policies escalate
• Banking sector stress if NPA concerns resurface

---

Bottom Line

Markets are experiencing a classic fear-driven selloff with technical indicators confirming bearish momentum. However, extreme fear readings (24.85) often mark short-term bottoms. The divergence between domestic and foreign institutional flows provides some cushion, but sustained recovery requires resolution of global trade uncertainties and stabilization of the rupee.

For Traders: Focus on defensive sectors and await oversold bounces in quality names.
For Investors: Current levels may offer entry opportunities in fundamentally strong companies, though patience for confirmation of trend reversal is advised.

Risk Disclaimer: This analysis is for educational purposes. Markets are inherently risky, and past performance doesn’t guarantee future results. Always conduct your own research before making investment decisions.

---

Disclaimer from aiTrendview.com

The content provided in this blog post is for educational and training purposes only. It is not intended to be, and should not be construed as, financial, investment, or trading advice. All charting and technical analysis examples are for illustrative purposes. Trading and investing in financial markets involve substantial risk of loss and are not suitable for every individual. Before making any financial decisions, you should consult with a qualified financial professional to assess your personal financial situation.