The Indian stock market is bracing for a challenging start as tensions between India and Pakistan escalate. Early trends from the GIFT Nifty indicate a significant drop, with the index trading around 23,974, reflecting a decline of approximately 298 points from the previous close of Nifty futures. The situation has intensified following recent attacks involving Pakistani drones and missiles targeting military stations near the International Border in Jammu and Kashmir (J&K), prompting a swift and successful response from the Indian Army Air Defence Units, which shot down two drones.

Market Overview

On Thursday, the domestic equity market faced downward pressure, primarily due to late-session selling exacerbated by rising geopolitical tensions. The Sensex fell by 411.97 points (0.51%) to close at 80,334.81, while the Nifty 50 dropped 140.60 points (0.58%), settling at 24,273.80.

Sensex Outlook

The Sensex displayed negative momentum on Thursday, forming a bearish candlestick pattern on daily charts, characterized by a lower top formation on intraday charts. According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, the index needs to stay above 80,900 to shift sentiment positively. If it remains below, it could retest support levels of 80,000 to 79,700. Conversely, a break above 80,900 could pave the way for a rise to 81,200 or even 81,400.

Nifty 50 Forecast

The Nifty 50 experienced a notable downward reversal, closing lower by 140 points amid growing geopolitical concerns. Nagaraj Shetti, a Senior Technical Research Analyst at HDFC Securities, noted that the formation of a long bearish candle indicates a potential downside breakout, with immediate support at the 10-day EMA around 24,250. A fall below 24,200 could lead to further declines toward 23,850. Conversely, resistance is identified at 24,450.

• Key support levels: 24,200, 23,850
• Key resistance levels: 24,450

Bank Nifty Analysis

The Bank Nifty index also faced downward pressure, closing at 54,365.65, down 245.25 points (0.45%). A bearish candle on the daily chart suggests profit booking at higher levels. Hrishikesh Yedve, AVP of Technical and Derivatives Research at Asit C. Mehta Investment Intermediates Ltd., pointed out that resistance lies around 55,000, with crucial support near 53,890.

Technical Indicators

Several analysts weigh in on the current market conditions:

• Om Mehra, Technical Research Analyst at SAMCO Securities, indicated that the Nifty 50 is perched precariously near its 9 EMA support. A breach below this could weaken the short-term trend, although it remains above the 20 and 50-day EMAs, suggesting the broader trend remains intact.

• VLA Ambala, Co-Founder of Stock Market Today, noted a "dark cloud cover" candlestick pattern for the Nifty 50, indicating a sell-on-rise sentiment due to macroeconomic factors.

Conclusion

As traders prepare for today’s session, it’s essential to monitor these key levels closely. The Nifty 50 and Bank Nifty are positioned at critical junctures that could dictate their near-term performance. Investors should remain cautious and consider level-based trading strategies to navigate this volatile landscape effectively.

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