Volatility spiked in Thursday’s trade to a one-month high on nervousness amid ongoing geopolitical developments. That was just the start to what might come. Investors might see a more heightened volatility in Friday’s trade as India retaliates to Pakistan’s attack on its cities and military bases. Experts see 24,900 as the key support zone.
The Nifty’s first support is placed in a range of 24,050-24,150, which is around the 200-day simple moving average. If breached, markets will fall further to the 23,850-23,900 level.
“If the market breaks below 24,200, we may see an increase in weakness throughout the day, potentially leading to a retest of levels 23,900 or 23,850, which were tested nine days ago. For a bullish market, it is essential to maintain levels above 23,800 on a closing basis; otherwise, the likelihood of a drop to 23,500 increases significantly,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities.
Reiterating the same viewpoint, analysts at SAMCO Securities said that a breakdown below 24,200 could flip sentiment bearish, inviting aggressive sell-offs toward 23,900- 24,000.
“The current market texture is non-directional; hence, level-based trading would be the ideal strategy for short-term traders,” Shrikant Chouhan.
All in all, the GIFT Nifty opened nearly 350 points down but half an hour into trade had recovered somewhat, so investors should brace for volatility when the cash market opens, said Akshay Chinchalkar, Head of Research at Axis Securities.
On Thursday, India VIX jumped 10.22% to close at 21, breaching the psychologically important 20 level. “This spike in volatility mirrors the rising uncertainty driven by escalating ongoing conflict concerns,” said SAMCO Securities.
The Nifty and Sensex saw a sudden fall during the last leg of the trading as India’s Defence Ministry confirmed thwarting Pakistan’s drone attack by neutralising its Air Defence System at Lahore, Pakistan.
Yesterday, the NSE Nifty 50 closed the session 140 points or 0.58% lower at 24,274, while the BSE Sensex rose 412 points or 0.51% to close at 80,335.
Also, how the FIIs will react to the geopolitical situations will be a key move to watch out for.