Indian equity benchmark indices are poised for a higher opening on Monday, drawing support from strong quarterly earnings posted by index heavyweight Reliance Industries and positive cues from Asian markets.
However, underlying investor caution is expected to linger due to heightened geopolitical tensions between India and Pakistan following a recent deadly terror attack.
Early indicators suggest a positive start for the domestic market. Gift Nifty futures were trading around 24,258.5 as of 7:59 am IST, pointing towards a potential gap-up opening for the Nifty 50 compared to its previous close of 24,039.35 on Friday.
This optimism follows positive trends seen in broader Asian markets, which started the week cautiously higher despite ongoing uncertainty surrounding US trade policies and the recent verbal sparring between Washington and Beijing.
Despite these supportive global signals, the escalating situation between India and Pakistan remains a significant factor influencing market sentiment.
India’s strong diplomatic measures against Pakistan, taken in response to the recent attack in Kashmir, led to increased market volatility and a pullback in the Sensex and Nifty during Friday’s session.
“During Friday’s session, the India VIX surged by 5%, reflecting growing concerns amid the possibility of a war between India and Pakistan,” VLA Ambala, Co-Founder of Stock Market Today, told India Today.
She anticipates near-term support for the Nifty between “23,850 and 23,680” with resistance near “24,180 and 24,370,” while Bank Nifty might find support at “54,100 and 53,850” and face resistance between “55,100 and 55,350.”
FPI flows resilient, long-term view positive
Encouragingly, foreign portfolio investors (FPIs) have maintained their buying interest in Indian equities, marking eight consecutive sessions of net purchases as of Friday.
Analysts attribute this resilience partly to a weakening US dollar trend and the perception of India’s economy being relatively better positioned compared to other major global economies.
However, the geopolitical situation could temper this enthusiasm in the immediate term.
Beyond the macro factors, specific corporate developments will be in focus.
Reliance Industries is expected to be a key positive influence after reporting better-than-anticipated fourth-quarter profits, driven by strong performance in its retail and digital segments.
Another stock likely to see activity is Mahindra & Mahindra, following its announcement to acquire a majority stake (58.96%) in truck and bus manufacturer SML Isuzu for approximately Rs 555 crore (around $65 million).
From a sectoral standpoint, technical analysts are observing potentially significant moves.
The auto sector has reportedly shown signs of a breakout from a “falling wedge” pattern, often considered a bullish indicator.
Meanwhile, the crucial IT sector is retesting a key resistance level after breaking a previous trendline, with its performance this week critical for confirming a sustained recovery.
Conversely, patterns like “shooting stars” observed in sectors such as PSU Banks, Pharma, and Realty could suggest potential short-term pullbacks or reversals, adding another layer of complexity amidst the geopolitical uncertainty.
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