Indian stock market will be influenced by a slew of economic data that are scheduled in the trading week ahead. Key inflation reports of CPI and WPI along with IIP will be eyed. Also, defence forces of India and Pakistan is expected to meet on Monday after a ceasefire agreement, which will drive sentiment further. Global trends, trade talks development between US and China, along with Q4 results of companies will also play pivotal role.
Sensex, Nifty:
On May 9th, Sensex closed at 79,454.47, down by 880.34 points, or 1.10%. Overall, during the trading week from May 5th to 9th, Sensex plunged by 1,541.59 points, or 1.90%.
Additionally, Nifty 50 dropped by 265.80 points or 1.10% to close at 24,008 on Friday. Overall, in the trading week, this 50-scrip benchmark dropped by 433.40 points or 1.8%.
Explaining on what dragged the market, analysts highlighted that the key equity indices registered notable losses this week, primarily driven by escalating geopolitical tensions between India and Pakistan following reports of drone and missile attacks.
"The sell-off intensified on the final trading day of the week, after the Indian Army reported multiple overnight drone and munition attacks by Pakistani forces, heightening fears of further escalation, Ajit Mishra - SVP, Research, Religare Broking added.
Stock Market Weekly Outlook:
Looking ahead, markets will closely monitor key domestic macroeconomic indicators, CPI and WPI inflation data. The consensus anticipates a potential softening in inflationary pressures. However, geopolitical tensions between India and Pakistan remain a point of concern in the near term. Despite its unfolding nature and the unexpected escalation, the market expects the issue to wrap up shortly based economic and military strength of India, as per Vinod Nair, Head of Research, Geojit Investments.
According to Puneet Singhania, Director at Master Trust Group, rising tensions between India and Pakistan are likely to dominate investor sentiment in the coming week, creating a cautious undertone in Indian equity markets. Any escalation along the border or strong diplomatic developments could lead to uncertainty. Alongside geopolitical concerns, the ongoing Q4 corporate earnings season will continue to drive stock-specific action. Further developments on both geopolitical and corporate fronts will play a crucial role in determining the market direction.
To investors, Mishra stated that heightened geopolitical tensions have substantially increased market volatility, as evidenced by the spike in the India VIX. In this environment, investors are encouraged to adopt a stock-specific approach and avoid aggressive positioning until greater clarity emerges. Employing a hedged strategy is advisable to mitigate near-term risks, while close attention to geopolitical developments will be critical in determining the market's direction moving forward.
Stocks like Adani Power, Yes Bank, SBI, Dr Reddy's Laboratories, Bank of India, Manappuram Finance, ABB India, and Birla Corp will be in focus on May 12, Monday. While major companies like Bajaj Electricals, JM Financials, Jyothy Lab, Morepen Lab, Raymond, PVR-Inox, SRF and Tata Steel will declare their Q4 results on Monday.
Technical Outlook:
Nifty 50 ended the week in the red after three consecutive weeks of gains, closing slightly above the 24,000 mark as investors remained cautious amid escalating geopolitical tensions between India and Pakistan. Sentiment took a hit due to rising cross-border conflict concerns. Technically, key support is placed near 23,800, the previous horizontal breakout zone. A breach below this may invite further selling pressure toward 23,500, which aligns with the 21-week EMA. On the upside, resistance lies at 24,250, and a sustained move beyond this could push the index toward 24,500. Positional traders may consider a buy-on-dips approach near the support zone, Singhania said.
From a technical perspective, Mishra said, the Nifty is currently hovering around key moving averages across various timeframes, suggesting the potential for further downside. The immediate support is placed at 23,800, and a decisive break below this level could extend the decline toward 23,200. On the upside, any rebound is expected to encounter strong resistance in the 24,400-24,600 range.
Notably, there are no stocks added under the F&O ban on Monday. However, Central Depository Services, Manappuram Finance, and RBL Bank stocks were retained in the list.
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.
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