Indian stock markets are expected to be volatile on May 8, 2025, influenced by a mix of domestic and global factors including geopolitical tensions and US Federal Reserve policy.
Global Market Cues and GIFT Nifty: Early indications suggest a potentially cautious start for Indian markets. GIFT Nifty is trading higher, suggesting a gap-up opening for Indian markets, supported by gains in Nifty 50 and Sensex in the previous session. However, other sources indicate a negative start, with GIFT Nifty trading around 24,412, a discount from the Nifty futures' previous close. US futures are showing strength, which could support risk appetite. Mixed global cues, with European indices closing in the red, add to the uncertainty.
US Fed Policy: The US Federal Reserve's decision to hold rates steady will likely influence market sentiment. The market will be looking for indications about future rate adjustments and the Fed's assessment of inflation and unemployment risks.
Operation Sindoor and Geopolitical Tensions: India's recent military action, "Operation Sindoor," targeting terrorist infrastructure in Pakistan, has introduced geopolitical uncertainty. While the Indian stock market has shown resilience, the situation remains sensitive. Escalating tensions could increase market volatility, and traders are advised to stay light and avoid aggressive positions.
Market Performance on May 7, 2025: Despite initial dips following "Operation Sindoor," the Sensex and Nifty closed higher on May 7. The BSE Sensex ended 105.71 points higher at 80,746.78, while the Nifty 50 gained 34.80 points to close at 24,414.40.
FII and DII Activity: Foreign institutional investors (FIIs) have been consistently bullish, injecting significant funds into Indian equities. On May 7, FIIs bought stocks worth Rs 2,585.86 crore, marking their 15th straight session as net buyers. Domestic institutional investors (DIIs) turned net buyers, mopping up equities worth Rs 2,378.49 crore. Sustained FII buying has been a key factor supporting market resilience.
Technical Outlook: The near-term outlook appears non-directional, with traders awaiting a breakout. * Sensex: Immediate resistance is expected at 81,000, and a break above this level could lead to further gains towards 81,300-81,500. Support is at 80,500; a break below this could trigger selling pressure, potentially retesting 80,200 and even 80,000-79,800. * Nifty 50: Immediate resistance is in the 24,500 to 24,600 range, while immediate support lies at 24,200. A fall below 24,200 could trigger more selling.
Trading Strategy: Given the geopolitical backdrop, traders are advised to remain cautious and avoid aggressive positions. Kotak Securities' Shrikant Chouhan suggests that 81,000 is the immediate breakout level for the Sensex, with potential movement up to 81,300-81,500 if breached. On the downside, a dismissal of 80,500 could accelerate selling pressure, potentially leading to a retest of 80,200.
Key Levels to Watch: * Sensex: Resistance at 81,200, Support at 80,000. * Nifty 50: Resistance at 24,500-24,600, Support at 24,200.
Overall: The Indian stock market on May 8, 2025, is expected to be influenced by global cues, the US Fed's policy stance, and domestic geopolitical tensions. While FII buying provides support, caution is advised given the prevailing uncertainties.
