Market Update: Sensex and Nifty 50 Experience Significant Decline Amid Geopolitical Concerns

In a turbulent trading session on Friday, the Indian stock market faced a sharp decline, with both the Sensex and Nifty 50 indices dropping significantly. This downturn was primarily driven by a slump in Axis Bank shares and escalating geopolitical tensions following a terrorist incident in Pahalgam, Jammu & Kashmir. After an initial positive start, the 30-share BSE Sensex plummeted by 1,004.04 points, closing at 78,797.39 during late morning trading, while the Nifty 50 fell by 338.1 points, settling at 23,908.60.

Geopolitical Tensions Impact Market Sentiment

Market analysts noted that the increase in geopolitical tensions, particularly after the recent terror attack, has negatively influenced investor sentiment. Despite these local challenges, Asian markets showcased some resilience, with indices such as South Korea’s Kospi, Japan’s Nikkei 225, and Hong Kong’s Hang Seng all showing positive movements.

• Foreign Institutional Investors (FIIs) were active, purchasing equities worth ₹8,250.53 crore on Thursday.
• The global oil benchmark, Brent crude, saw a 0.65% increase, reaching USD 66.98 per barrel.

Insights from Experts on Market Dynamics

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, highlighted the mixed conditions currently affecting the market. While FII buying has surged to ₹29,513 crore over the past week, indicating a shift in investment focus back to Indian stocks, uncertainty surrounding the nation’s response to terrorism poses a potential risk.

Additionally, U.S. Treasury Secretary Scot Bessent mentioned that India is likely to be the first nation to establish a bilateral trade agreement with the U.S., further emphasizing the importance of India’s economic stability in bolstering market confidence.

Market Predictions: Nifty 50 and Bank Nifty Outlook

Prashanth Tapse, Senior Vice President of Research at Mehta Equities, provided insights on the Nifty 50 and Bank Nifty trends:

• Nifty 50 is currently trading between 24,100 and 24,350, indicating a phase of consolidation. A breakout above 24,350 could signal a bullish trend, aiming for targets around 24,400 and 24,500. Investors should keep an eye on the critical support level of 24,000.

• Bank Nifty also displays a consolidation pattern within the range of 54,800 to 55,500. A drop below 54,800 may lead to negative market momentum, while a move above 55,500 can extend the current upward trend towards 56,000.

Top Stock Picks for Short-Term Gains

Prashanth Tapse recommends three stocks for short-term investors:

• Infosys Ltd

  • Current Price: ₹1,488
  • Target Price: ₹1,550
  • Stop Loss: ₹1,450
  • Recently rebounded from a support level near ₹1,450, showing promising upward momentum.

• Tata Motors Ltd

  • Current Price: ₹666
  • Target Price: ₹700
  • Stop Loss: ₹640
  • Trading within a rising channel, indicating strength, with solid support at ₹640.
• Reliance Industries Ltd (RIL)
  • Current Price: ₹1,320
  • Target Price: ₹1,350
  • Stop Loss: ₹1,300
  • Consolidating in a tight range, with a breakout above ₹1,320 potentially leading to short-term gains.

Conclusion

As the market grapples with both local and global challenges, investors should remain vigilant. The ongoing FII buying presents potential opportunities, but geopolitical uncertainties could influence market dynamics significantly. Keeping an eye on key support levels and market sentiment can aid investors in navigating this volatile landscape effectively.