The Indian stock market, represented by the Sensex and Nifty 50 indices, is anticipated to experience a downturn on Wednesday due to escalating geopolitical tensions between India and Pakistan, along with mixed signals from global markets. The Gift Nifty, a key indicator for Indian benchmarks, is showing signs of a negative opening, trading around 24,359, which is a drop of approximately 72 points from the previous close of Nifty futures.

Geopolitical Tensions Impacting Market Sentiment

The recent military operation named ‘Operation Sindoor’, executed by the Indian Armed Forces, has intensified market concerns. This operation targeted nine significant terrorist sites within Pakistan, contributing to the prevailing negative sentiment in the market. On the prior trading day, the domestic indices closed in the red, with the Nifty 50 falling below the 24,400 mark.

• Sensex: Decreased by 155.77 points (0.19%), finishing at 80,641.07.
• Nifty 50: Dropped 81.55 points (0.33%), settling at 24,379.60.

Sensex Forecast: A Bearish Outlook

The Sensex is showing signs of weakness, forming a bearish candle on the daily charts. According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, the index’s performance below the 81,000 level suggests continued negative sentiment. He predicts potential support around 80,300, with the possibility of further declines, possibly reaching 80,000. Conversely, if the index surpasses 81,000, it could rally to the 81,300 – 81,400 range.

Nifty 50 Analysis: Choppy Terrain Ahead

The Nifty 50 also closed lower, with a significant bearish candle forming on the daily chart. Nagaraj Shetti, a Senior Technical Research Analyst at HDFC Securities, noted that the market’s momentum is weak, indicating that any drop below the immediate support level of 24,200 could lead to a short-term correction. However, a rise above 24,600 would alleviate bearish pressures.

Om Mehra, a Technical Research Analyst at SAMCO Securities, pointed out that the Nifty 50 is still positioned above crucial moving averages, maintaining a broader upward trend. He warned that if it dips below 24,240, the 9 EMA could turn into a resistance barrier.

Key Market Indicators

• India VIX: Increased by 3.60%, settling at 19, reflecting growing market anxiety.
• Resistance Levels: Nifty’s resistance is noted at 24,530.
• Support Levels: Key support zones are identified at 24,200 and 24,050.

Bank Nifty: A Shift in Dynamics

The Bank Nifty index faced a significant decline, dropping 648.10 points (1.18%) to close at 54,271.40. This decline formed a bearish candle on the daily chart. According to Om Mehra, Bank Nifty has breached its 9 EMA and the previous swing low, indicating possible vulnerability in the support zone.

• Next Support: Critical support is observed near 53,400, aligned with the 20-Day Simple Moving Average.
• Resistance Levels: Immediate resistance is pegged at 55,000 and subsequently 56,000.

Investment Strategy Moving Forward

Market experts recommend a cautious approach for traders. With the current trend showing signs of a typical correction rather than a complete reversal, the focus should remain on levels-based trading.

• For Nifty 50: Watch for support around 24,250 and 24,180; resistance is likely between 24,550 and 24,640.
• For Bank Nifty: A "sell on rise" strategy is advised until it surpasses 56,000.

As the market navigates these uncertainties, traders are encouraged to remain vigilant and flexible, adapting their strategies in response to market movements.