India’s benchmark stock indices, the Sensex and Nifty 50, opened with modest declines on Thursday morning, interrupting a seven-day winning streak as rising geopolitical tensions between India and Pakistan prompted caution among investors.
The cautious start came despite underlying positive factors like continued foreign investment flows.
In the wake of diplomatic measures taken by India against Pakistan following the recent deadly terror attack in Pahalgam, investor sentiment turned slightly risk-averse at the opening bell.
The Nifty 50 index began trading at 24,277.90, down 51.05 points or 0.21 per cent from its previous close.
Similarly, the BSE Sensex opened lower at 79,982.18, registering a decline of 134.31 points or 0.17 per cent.
While market analysts acknowledge the fundamental strength of the Indian economy and recent positive foreign portfolio investment (FPI) trends, the escalating situation with Pakistan introduces a near-term uncertainty.
Ajay Bagga, a Banking and Market Expert, provided context to ANI, stating, “Global cues are positive, FPI inflows are positive, earnings in pockets are positive and the Indian market breadth has turned decidedly positive.”
However, he added a crucial caveat: “The overhang remains for the next 10 days to 15 days, the time it took in the previous two instances from the terrorist strike to the retaliatory Uri and Balakot strikes.”
Bagga also noted that while announced diplomatic measures, including those related to the Indus Water Treaty, are significant, their tangible impact would require “major infrastructure execution.”
Sectoral divergence: defensives favored
The cautious mood was reflected in sectoral performance during early trade. Indices representing PSU Banks, Media, and Auto stocks opened in negative territory.
Conversely, sectors often seen as defensive plays, such as Nifty FMCG, Nifty IT, and Nifty Pharma, started the session with gains.
This divergence suggested selective buying, possibly favoring sectors perceived as less sensitive to immediate geopolitical shocks.
Earnings season heats up
Adding another layer to the market dynamics, investors are closely watching the ongoing fourth-quarter earnings season.
A significant roster of major companies is scheduled to release their financial results today (Thursday), providing crucial insights into corporate health amid the current economic climate.
Key names reporting include Hindustan Unilever, Axis Bank, Nestle India, SBI Life Insurance Company, Tech Mahindra, Macrotech Developers, Adani Energy Solutions, SBI Cards & Payment Services, Persistent Systems, MphasiS, and L&T Technology Services.
Technical perspective: rally vulnerable?
From a technical standpoint, the recent sharp rally has brought the market to a potentially critical juncture.
Akshay Chinchalkar, Head of Research at Axis Securities, observed, “The nifty rose for the seventh day yesterday, for the first time in a month.”
He noted that the previous day’s trading pattern formed a “hanging man” candle following Tuesday’s “doji,” patterns often suggesting potential indecision or a possible stalling of the upward trend.
Chinchalkar identified immediate support for the Nifty at “24120” and resistance near “24500,” warning that “a volatility pickup may be seen over the next two sessions” as the market digests various factors.
Asian markets show mixed picture
Meanwhile, the broader Asian market landscape presented a mixed picture on Thursday morning.
Japan’s Nikkei 225 index saw strong gains, rising over 1 per cent, and Singapore’s Straits Times edged slightly higher.
However, other major indices, including those in Taiwan, South Korea, and Hong Kong (Hang Seng down 1.51 per cent), traded lower, reflecting varied regional reactions to global and local factors.
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