The Indian stock market experienced a bumpy start on Wednesday, initially dipping into the red before staging a recovery. Following India’s decisive anti-terror operations in Pakistan, the Nifty 50 index opened lower, falling by 146 points to 24,233.30, a decrease of 0.60%. The Sensex also faced a setback, starting at 79,948.80, down 692.27 points or 0.86%. However, the markets quickly bounced back, reflecting a resilient sentiment among investors.

Market Response to Geopolitical Tensions

Market analysts indicated that heightened tensions at the border could lead to negative reactions within Indian markets. However, they noted that “Operation Sindoor” differs from previous operations due to its precise and non-escalatory strategy. Observing how the opposing side reacts is crucial, but analysts believe that potential retaliatory measures from India have already been priced into the market.

• Key Insight: The consistent buying by foreign institutional investors (FIIs) over the last 14 trading sessions, amounting to ₹43,940 crores in cash markets, has been a significant factor in maintaining market stability.

Nifty 50 Analysis by Sagar Doshi

Despite reaching 4.5-month highs, the Nifty 50 index has encountered resistance in the range of 24,400 to 24,650. This selling pressure may prompt a retest of support levels between 23,900 and 24,000 before determining the next steps for the index. Since geopolitical tensions escalated two weeks ago, the index has remained within a narrow 2% range. Notably, for the first time in seven trading days, the index closed below the previous day’s low, indicating potential short-term weakness.

Insights on Bank Nifty and Future Trends

The Bank Nifty index has also been under scrutiny, having consistently traded within a range of 54,200 to 56,000. Analysts suggest that breaking below 54,200 could lead to further declines towards 53,500 or even 53,100. The prior outperformance of the Bank Nifty compared to the Nifty 50 appears to have diminished as the market consolidates with a bearish outlook.

Stock Recommendations for Investors

Sagar Doshi from Nuvama has highlighted three stocks to consider for Wednesday’s trading:

• Divis Laboratories Ltd (BUY):

  • Current Price (LCP): ₹6,161
  • Stop Loss (SL): ₹5,900
  • Target (TGT): ₹6,600
  • A breakout from a six-month consolidation suggests potential gains of 8-10% in the short term.

• HCL Technologies Ltd (BUY):

  • LCP: ₹1,597.10
  • SL: ₹1,536
  • TGT: ₹1,725
  • An inverted head and shoulder pattern indicates a forthcoming breakout at around the ₹1,600 level.
• Marico Ltd (BUY):
  • LCP: ₹720.10
  • SL: ₹694
  • TGT: ₹780
  • Marico has achieved its highest closing price amidst market turbulence, signaling strong investor interest in FMCG stocks.

Final Thoughts

As the Indian stock market navigates through geopolitical challenges, consistent foreign investments and strategic stock selections remain key for investors. Keeping an eye on both market trends and individual stock performances will be essential in making informed decisions during this volatile period.