The Lowdown on Nifty Levels Today, May 09: Be Ready for Nifty Swings as Geopolitical Strife Intensifies; Solid Support at 23,900
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Indian equity markets may experience increased volatility, prompting Nifty to hover around the 23,900 level as tensions between India and Pakistan escalate.
Markets brace for a roller coaster ride today, with volumes cranking up in Thursday's trade due to heightened nerves triggered by ongoing geopolitical scuffles. Brace yourselves, as we could be seeing larger swings tomorrow as India reacts to Pakistan's hostilities against its cities and military installations. The savvy crew at Kotak Securities eyes 24,900 as a key support zone.
The Nifty's first line of defense is stationed between 24,050-24,150, not far off from its 200-day simple moving average. If this buffer gets breached, expect a steep drop to the 23,850-23,900 level.
But Will the Market Head South Today? Check out Our Gist from this Hour
If the market smashes below 24,200, we can expect increased weakness throughout the trading day, potentially resulting in a retest of levels 23,900 or 23,850, which were tested nine days back. To keep the bullish mood alive, it's essential to maintain levels above 23,800 on a closing basis; otherwise, the chances of a slide to 23,500 surge significantly, according to Kotak Securities' Head of Equity Research, Shrikant Chouhan.
Likewise, SAMCO Securities' analysts ponder that a breakdown below 24,200 could incite a bearish sentiments and trigger aggressive sell-offs towards 23,900-24,000. Bottom line: short-term traders should stick to level-based trading.
Chin up, as the GIFT Nifty opened with a nosedive of nearly 350 points but partly recovered within the first half-hour of trade, signaling another day of volatility lies ahead as the cash market opens.
In the Heat of the Moment: What Happened Yesterday?
India VIX leapt 10.22% on Thursday to close above the milestone 20 level, reflecting escalating uncertainty due to intensifying conflict speculations. As India's Defense Ministry confirmed that it had successfully intercepted Pakistan's drone attack on its Lahore Air Defence System, the Nifty and Sensex suffered a nosedive during the final leg of trading.
Yesterday, the NSE Nifty 50 closed the session 140 points or 0.58% lower at 24,274, while the BSE Sensex posted a minor gain of 412 points or 0.51% to finish at 80,335.
The Big Question: What About FIIs?
We'll keep our eyes peeled to see how Foreign Institutional Investors (FIIs) respond to the geopolitical situation—a crucial element to watch in the days ahead.
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Clinching Insights:
- Indian Market Forecast: The Gift Nifty is expected to open with a slight dip compared to Thursday's trading sessions, according to sources[3].
- Market Moves: While the current geopolitical tension between India and Pakistan might impact the market, global economic indicators and stock trends could play an influential role as well[4].
- Traders should prepare for higher volatility in defi trading and stocks market, as escalating geopolitical issues between India and Pakistan may intensify, potentially leading to larger swings tomorrow.
- The Nifty's initial defense line is situated between 24,050-24,150, and a breach of this buffer might trigger a steep drop towards the 23,850-23,900 level.
- If the market falls below 24,200, traders may observe increased weakness, potentially leading to retests of levels around 23,900 or 23,850, which were previously tested nine days back.
- short-term traders are advised to stick to level-based trading to navigate the anticipated volatility.
- On Friday, the GIFT Nifty is expected to open with a slight dip compared to Thursday's trading sessions, and the market might continue to exhibit volatility throughout the day.
- Foreign Institutional Investors (FIIs) will be closely monitored to assess how they respond to the ongoing geopolitical tensions between India and Pakistan, which could influence market trends in the upcoming days.
