D-Street Ahead: Domestic equity benchmarks Sensex and Nifty 50, limiting their weekly gains, weighed by broad-based sectoral losses and investor anxiety over geopolitical tensions following a deadly militant attack in Kashmir.
The Nifty 50 fell 0.86% to 24,039.35 while the BSE Sensex lost 0.74% to 79,212.53.
Both the benchmarks rose about 0.8% each this week. IT index jumped 6.6% to log their best week since June 7, 2024. The broader, more domestically focussed small-caps and mid-caps lost about 2.5% each, as investors turned risk-averse after an attack on tourists in Kashmir killed 26 men and heightened geopolitical tensions.
Experts said worries over growing geopolitical tensions after Tuesday’s Pahalgam terror attack weighed on market sentiment.
All sectoral indices except for IT index closed in the red while midcap and smallcap indices dropped more than 2 per cent due to profit taking.
The Nifty’s sharp rebound over the past three weeks has been almost vertical, suggesting the possibility of some consolidation before the next major directional move. It will be crucial for the Nifty to hold the 23,800 level to maintain its bullish bias; a breach could lead to extended profit-taking, with the next major support seen near 23,400—where key moving averages such as the 20-day, 100-day, and 200-day EMAs converge. On the upside, a decisive breakout above 24,400 could re-ignite bullish momentum, potentially propelling the index toward the 24,800 mark.
Rate-sensitive sectors, particularly banking and financials have played a pivotal role in the recent market uptrend. While some consolidation may be seen in the banking index, the broader tone remains optimistic. In case of further correction, buying interest is expected to emerge around the 52,800–53,700 zone, with an upside potential toward 55,500–57,000.
In the current scenario, it is advisable to maintain a positive yet cautious approach, with a preference for hedged positions in the index. Stock-specific opportunities are likely to remain abundant on both the long and short sides. Hence, the focus should be on identifying stocks with favorable risk-reward setups.
