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On Friday, Nifty declined 207.35 points or 0.86% to end the day at 24,039.35.
Commenting on the day’s action, Rupak De, Senior Technical Analyst at LKP Securities said that the Nifty technical charts show a rise of bearish sentiment as the headline index fell for the second session in a row after a consolidation on the daily chart.
“Additionally, the index has fallen below its 200-DMA, signaling a potential re-entry into a bearish trend. Investor sentiment remains weak, with a clear risk-off approach ahead of the weekend, amid rising tensions between India and Pakistan. In the short term, sentiment is likely to continue driving the market trend, with the possibility of the index heading lower. Support on the lower end, is placed at 23,800/23,515,” De said.
Factors that are likely to impact movement when markets reopen this week:
India-Pakistan tension
The markets are expected to remain jittery this week as the chorus on taking some deterrent action on Pakistan, grows. There have been calls for conducting a military strike in Pakistani territory, similar to the one done in 2019.
Indian stock markets fell on Friday as the tension weighed on the domestic stock markets.
The nuclear-armed nations have already unleashed a slew of measures against each other.
Q4FY25 earnings
Over 180 companies will be announcing their quarterly earnings this week and Street will be keeping a close track on them. Some of the big results expected during the week include TVS Motor Company, UltraTech Cement, Ambuja Cements, Bajaj Finserv, Bajaj Finance, Bharat Petroleum Corporation, Trent , Vedanta, Avenue Supermarts, Kotak Mahindra Bank, Adani Power, Adani Green Energy, Adani Total Gas and IRFC among others.
The markets will also take cues from the earnings of Reliance Industries (RIL) which announced its Q4 results after market hours on Friday. Meanwhile IDFC First Bank and India Cements which declared results on Saturday could see stock specific action.
US Markets
Indian markets will also take cues from Wall Street which ended with gains on Friday. Dow 30 closed with marginal uptick at 40,113.50, gaining by 20.10 points or 0.05% while the S&P 500 finished 40.44 points or 0.74% higher at 5,525.21. Nasdaq Composite closed at 17,382.90, witnessing a 216.90 points or 1.26% rise.
FII / DII Action
Market actions will rely on how foreign institutional investors (FIIs) behave. On Friday, FIIs sold shares worth Rs 2,952.33 crore while the domestic institutional investors (DIIs) were net buyers at Rs 3,539.85.
Technical Factors
Nifty ended Friday with second successive losses. Commenting on the action, Bajaj Broking Research said that the index has formed a bull candle on weekly chart with a long upper shadow which maintained a higher high and higher low signaling positive bias with profit booking at higher levels after recent strong up move.
“Going ahead in the coming truncated week a move above last 3 sessions almost identical high (24,365) will open further upside towards 24,550 being the 61.8% retracement of the entire decline (26277-21743). Failure to move above last week’s high (24365) will signal consolidation in the range 23,500-24,350. Volatility is expected to remain elevated amid geo-political tensions, Tariff related development and the progress of the Q4 earnings season,” this brokerage said.
Rupee Vs Dollar
The Indian rupee ended weaker in a volatile session on Friday as investors stayed cautious amid fears of an escalation in tensions with Pakistan after a militant attack in Kashmir earlier this week.
The rupee ended 0.2% lower against the U.S. dollar at 85.45 compared with its previous close of 85.26. It moved between 85.09 and 85.6550 on Friday. The local unit dropped about 0.1% week-on-week.
The rupee’s “inability” to rise above its key psychological level of 85 and month-end dollar payments “exacerbated” its downward move, a trader with a private bank said.
Rupee could weaken if the tensions between the neighbours escalate.
IPOs this week
Ather Energy IPO will open on April 28 along with two other SME IPOs this week. Ather Energy has priced the IPO in the range of Rs 304-321 per share. The company is planning to raise around Rs 3,000 crore through the public offer, which is a combination of fresh equity sale and OFS.
SME segment
Meanwhile, the SME IPO of Arunaya Organics and Kenrik Industries will open for subscription April 29. The issue of Arunaya will close on May 2, while that of Kenrik will be available till May 6. Arunaya Organics has fixed a price band of Rs 55 to 58 per share. The IPO is priced at a meagre Rs 25.
Crude Oil
Crude oil prices remain critical for the stock markets as they have the potential to alter the inflation dynamics in a country.
The US WTI oil contracts ended at $63.17, up by $0.38 or 0.61% while Brent oil futures were hovering near $66.87, higher by $0.36 or 0.54%.
Gold
Gold has been in stellar form and are still up by nearly 24% despite the previous week’s fall. The yellow metal is off from its lifetime peak, where it hit a Rs 1 lakh milestone in the physical markets.
While gold is trading in an overbought zone, the India-Pakistan situation and rupee weakness could keep the prices steady and on the up.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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