Indian stock markets began the week on a positive note, but geopolitical tensions and global cues are creating some uncertainty for traders. The Nifty 50 index closed at 24,461.15, a gain of 0.47%. However, the Bank Nifty ended lower by 0.30% at 54,919.50. Broader market indices, particularly auto, oil & gas, and FMCG sectors, saw gains.
Trade Setup for Nifty 50
The Nifty is currently trading within a narrow range of 24,200 to 24,500. Analysts suggest that 24,200 will act as a crucial support zone. Sustaining above this level could propel the Nifty towards 24,600-24,800. A decisive breakout above 24,550 could trigger a bullish move towards 25,000. However, a fall below 24,200 increases the possibility of the index hitting the 200-day SMA at 24,050. Immediate resistance is placed at 24,590, and a sustained move above this level could push the Nifty 50 towards 24,800–24,850.
India-Pakistan Conflict
Escalating tensions between India and Pakistan are a significant concern for investors. Following the recent terrorist attack in Pahalgam, India has taken several steps, including suspending the Indus Waters Treaty and banning imports from Pakistan. The potential for retaliatory responses and further fallout is weighing on investor sentiment and may limit market gains. Heightened uncertainty could lead to panic selling and a flight of foreign capital. However, some experts recommend accumulating quality large-cap stocks, viewing the current situation as a buying opportunity. If the situation remains controlled, the financial markets may not experience significant disruption.
Global Cues and Q4 Results
Besides geopolitical tensions, the market is also awaiting clarity on the potential US-China trade deal and assessing the likelihood of a prolonged recession in the US. The US GDP contracted in the first quarter, and manufacturing activity has slowed. The coming week is crucial, with the Fed's interest rate decision due on May 7. Investors will also be closely watching the HSBC Composite PMI and Services PMI data. Several prominent companies, including M&M, Coal India, Asian Paints, and L&T, are scheduled to release their Q4 results, which will likely influence stock-specific movements.
Stocks to Buy or Sell
Analysts have offered several stock recommendations for today:
Trading Strategy
Given the current market conditions, analysts recommend a strategy of consolidation with a positive bias, while closely monitoring global cues and geopolitical developments. A strong close above 24,550 for the Nifty is essential for confirming a bullish outlook. For Bank Nifty, a sustained move above 56,098 could trigger an upside towards 56,800. It's crucial to remain vigilant and adapt trading strategies based on market movements and news flow.
