Indian equity benchmarks are poised for a lower opening on Thursday, overshadowed by a significant escalation in geopolitical tensions between India and Pakistan, even as global market cues remain mixed.
Investor sentiment is expected to be cautious following India’s retaliatory military action and subsequent reports of cross-border aggression.
The primary driver for the anticipated weak start is the heightened friction along the India-Pakistan border.
Following India’s ‘Operation Sindoor’ strikes against terrorist camps early Wednesday – a response to the deadly Pahalgam attack – reports emerged of aggressive attacks by the Pakistan military along the Line of Control (LoC), tragically resulting in civilian deaths in Kashmir’s Poonch district, followed by shelling targeting civilians in the Kupwara region.
This escalation introduces significant uncertainty and risk aversion into the market calculus.
Early indicators confirm this cautious outlook.
Trends on Gift Nifty suggested a negative opening for domestic indices, with Gift Nifty trading around the 24,412 level – a discount of nearly 49 points from Nifty futures’ previous close.
The Indian Rupee also opened weaker against the US dollar at 84.63, compared to Tuesday’s close of 84.43.
Mixed global cues and domestic consolidation
This heightened local tension contrasts with overnight developments in the US, where Wall Street indices managed to close higher.
This followed the US Federal Reserve’s decision to keep interest rates unchanged, brushing off pressure from President Donald Trump for rate cuts, while acknowledging that risks to both inflation and employment have risen.
While a positive US close might typically offer support, the pressing domestic geopolitical situation is likely to take precedence for Indian markets today.
Domestically, the market had already shown signs of pausing after a strong rally.
On Tuesday, indices ended a choppy session largely flat, with the Nifty 50 closing just above the 24,400 level (at 24,414.40, up 0.14%) and the Sensex finishing slightly higher (at 80,746.78, up 0.13%).
Technical levels signal indecision
Technical analysts suggest the market is currently in a state of consolidation near key resistance levels.
According to Live Mint, Shrikant Chouhan, Head Equity Research at Kotak Securities, noted the Sensex formed a bearish candle on Tuesday and is exhibiting a non-directional texture.
“We are of the view that as long as Sensex is trading below 81,000, the weak sentiment is likely to continue,” Chouhan stated, identifying potential downside towards 80,300 or even 80,000 if support at 80,500 breaks.
Conversely, a move above 81,000 could target 81,300-81,500.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, observed a “reasonable negative candle” on the Nifty 50 daily chart, signaling lackluster movement and potentially a “rising wedge” pattern hinting at a possible reversal.
He cautioned that weakness below immediate support at 24,200 could trigger a short-term correction, while a decisive move above resistance near 24,600 is needed to negate bearish signals.
The India VIX, a measure of volatility, rose 3.6% on Tuesday, reflecting increasing market nervousness even before the latest LoC attacks.
Interestingly, the Bank Nifty closed higher on Wednesday (up 0.63% at 54,610.90), forming a potentially bullish “Piercing Line” candlestick pattern, suggesting some buying strength in that specific segment despite the broader caution.
Earnings season continues amid uncertainty
Amidst the geopolitical focus, the fourth-quarter earnings season rolls on, providing company-specific drivers.
Key results are expected today from L&T, Titan, Britannia, Pidilite, Biocon, Union Bank, Bharat Forge, and Canara Bank, among others.
Investors will also react to results declared after market hours yesterday, such as those from Coal India.
Other stocks like Dabur, Niva Bupa, United Breweries, Blue Star, and Asian Paints will also be watched closely.
Market participants will navigate Wednesday’s session balancing the significant geopolitical overhang against ongoing earnings results and underlying market technicals.
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