The Nifty has been on a losing streak, experiencing its longest decline since February 2023. This decline is due to a significant sell-off in IT and energy stocks. The market sentiment has shifted from a "buy the dip" strategy to a "sell on the rise" approach.

The recent 10 percent drop from peak levels is seen as a technical correction. The Sensex had a volatile day, swinging 900 points and ultimately closing down 241.30 points or 0.31 percent at 77,339.01. The Nifty fell 78.90 points or 0.34 percent to settle at 23,453.80.

Investor concerns are driven by factors such as the potential slowdown of interest rate cuts by the US Federal Reserve, disappointing Q2 earnings, ongoing foreign outflows, and stretched valuations. Market participants have observed that a small rebound is typically seen when the Nifty approaches the 200-day moving average. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, suggests that investors should wait a few more days to see if a decisive bounce back is imminent. However, the reduction in foreign outflows and domestic institutions buying the dip are seen as positive signs for the market.