SENTIMENT INDICATORS

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200-DMA INDICATOR  

The 200-day moving average (200-DMA) setup improved between April 1 and April 8, 2026, pointing to a modest recov ery in market breadth. The percentage of Nifty 50 constituents trading above their 200-DMA rose from 24 per cent on April 1 to 30 per cent on April 8, while those trading below this long term level declined from 76 per cent to 70 per cent. During the same period, the Nifty gained 5.81 per cent, indicating that the rebound was supported by improving participation across the index rather than being driven only by a handful of heavyweight stocks. The stock-level movement also reflects this improvement. Axis Bank, Bajaj Auto, JSW Steel, and Larsen & Toubro moved above their 200-DMA during this phase, while Sun Pharma slipped below this key long-term threshold. This net improvement suggests that selling pressure has eased somewhat and that select pockets of strength are beginning to emerge. Even so, with 70 per cent of the index constituents still trading below their 200-DMA, the broader structure cannot yet be called fully healthy. The recent shift is encouraging, but for a stronger and more durable market view, breadth will need to improve further and sustain this momentum over the coming sessions. 

SECTORAL SENTIMENT INDICATOR 

The sectoral 200-day moving average (200-DMA) breadth as of April 8, 2026, shows a visible improvement compared with April 1, suggesting that participation has started to widen across select pockets of the market. While the broader setup is still uneven, the latest reading indicates that weakness is no longer as intense as it was a week ago, with several sectors seeing a meaningful rise in the share of stocks trading above their 200-DMA. The banking and financial space has improved, though the picture remains mixed. Nifty Bank rose 16.67 points to 33.33 per cent of stocks above the 200-DMA, while Nifty Private Bank saw a sharper recovery, jumping 30 points to 40 per cent. Nifty Financial Services also moved higher by 10 points to 35 per cent, and Nifty PSU Bank improved 8.33 points to 41.67 per cent. Among cyclical sectors, Nifty Auto posted a strong rebound, rising 26.67 points to 40 per cent, while Nifty Metal remained the strongest pocket with 86.67 per cent of stocks above the 200-DMA after a further 20-point improvement. Nifty Realty also recovered from a weak base, moving up 20 points to 20 per cent. On the other hand, some sectors continue to lag. Nifty IT remained stuck at 0 per cent, showing no improvement at all, while Nifty FMCG was unchanged at a weak 6.67 per cent. Nifty Pharma was the only sector to deteriorate, slipping 5 points to 40 per cent. Nifty Media improved modestly by 10 points to 30 per cent. Overall, the sectoral breadth picture has turned better than the previous reading, led by metals, auto, and parts of the banking pack, but the recovery is still not broad enough to suggest a fully healthy market structure. 

Indicator To Gauge Internal Strength 

This indicator helps assess the internal strength of the broader market by tracking how many Nifty 500 stocks are making fresh 52-week highs versus how many are slipping to new 52-week lows. In a healthy market, new highs begin to expand while new lows shrink, showing that strength is spreading across a wider set of stocks. When highs remain scarce and lows dominate, it usually suggests that the market lacks depth and leadership. Between April 1 and April 8, 2026, the internal setup improved meaningfully. The number of Nifty 500 stocks hitting fresh 52-week highs rose from 0 to 3, while fresh 52-week lows declined from 2 to 0. During the same period, the Nifty 500 advanced 5.74 per cent, rising from 20,935.2 to 22,137.1. This suggests that the broader market rebound was accompanied by a visible improvement in internal participation. The stock-wise data also signals that selling pressure has cooled compared with the turbulence seen in late March, when 52-week lows had spiked sharply. The drop in fresh lows to zero is a constructive sign, while the reappearance of new highs indicates that leadership is beginning to return. Although the number of new highs is still small, the shift from zero highs and two lows to three highs and no lows marks a healthier short-term breadth structure.

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