Indian Stock Market: Can Sensex & Nifty 50 Recover Amidst Geopolitical Tensions?
Indian Stocks Open Lower Amidst Geopolitical Uncertainty
The Indian stock market kicked off Wednesday on a shaky note, with both the Sensex and Nifty 50 indices dipping, reflecting the growing geopolitical tension between India and Pakistan. Adding to the bearish sentiment is the response to India’s ‘Operation Sindoor’, where the Indian Armed Forces targeted terrorist infrastructure in Pakistan.
Tuesday saw the domestic equity market close lower, with the Nifty 50 falling below the 24,400 mark. The Sensex shed 155.77 points (0.19%) to close at 80,641.07, while the Nifty 50 settled 81.55 points (0.33%) lower at 24,379.60.
Sensex Prediction: A Battle Between Support and Resistance
Analysts at Kotak Securities are watching the 81,000 level closely. They believe as long as the Sensex remains below this mark, the bearish sentiment will persist. On the downside, the index could test the 80,300 level, with a further drop potentially taking it down to 80,000. However, a surge above 81,000 could propel the Sensex towards 81,300 – 81,400.
Nifty 50: A Choppy Trend with Potential Reversal
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, points to a ‘rising wedge’ pattern forming in the Nifty 50, suggesting a potential reversal after a strong rally. He warns that a breach below the immediate support of 24,200 could trigger a short-term decline. However, a decisive move above 24,600 could alleviate these bearish concerns for the near future.
Om Mehra, Technical Research Analyst at SAMCO Securities, sees a similar picture. While the Nifty 50 remains above key moving averages, indicating an overall positive trend, the formation of a bearish engulfing pattern hints at a potential pause or reversal in the uptrend. He emphasizes the importance of the 24,240 level as a potential support barrier.
The India VIX, a measure of market volatility, rose 3.60 percent to settle at 19, reflecting increased nervousness.
Bank Nifty: A Correction in a Bullish Market
The Bank Nifty index also dipped, closing at 54,271.40 after a bearish candle formed on the daily chart. Om Mehra attributes the decline to mean reversion and a break below its 9 EMA. He identifies the 38.2% Fibonacci retracement level, around 53,400, as a crucial support zone.
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Intermediates Ltd., warns that Bank Nifty’s decline could continue, with the index potentially falling to the 24,200 – 24,050 zone if it falls below 24,300.
Expert Advice: Cautious Optimism Amidst Uncertainty
VLA Ambala, Co-Founder of Stock Market Today, suggests that traders with a long-term view should wait for further price dips before taking new positions. He anticipates that the Nifty 50 will find support near 24,250 and 24,180, while resistance might be encountered between 24,550 and 24,640.
While the current market conditions are undeniably turbulent, experts remain cautiously optimistic. They believe that the underlying trend remains positive, and this dip could be a temporary pullback. However, it’s crucial for investors to keep a close eye on geopolitical developments and market indicators to navigate this volatile period effectively.
