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Market Update

Nifty : 24,273.80 -140.60 (-0.58%)

Sensex : 80,334.81 -411.97 (-0.51%)

* The equity benchmark Nifty dropped by over half a percent, while the India Volatility Index surged by 10%, reaching a one-month high at 21, as rising tensions between India and Pakistan affected investor sentiment. Despite a positive market opening, a sharp sell-off occurred during the final trading hour after the Indian government confirmed that its armed forces had targeted air defense radars and systems at multiple locations in Pakistan.

* Geopolitical tensions were further exacerbated by hawkish remarks from the US Federal Reserve, which raised concerns about inflation and unemployment risks, dampening market sentiment. Additionally, the Rupee weakened by 1.1%, marking its biggest drop since February 2022, to 85.79 per dollar after India confirmed neutralizing an air defense system in Pakistan.

* Nifty fell 140 points, or 0.60%, settling below the 24,300 mark at 24,273, after briefly touching an intra-day high of 24,447. Mid- and small-cap stocks, known for their higher volatility, saw larger declines, with the Nifty Midcap 100 falling 2.20%, while the Nifty Smallcap 100 lost 1.6%.

* Nifty Realty, Metal, and Pharma indices each dropped by nearly 2%. On the other hand, the Nifty IT index closed in positive territory, fueled by hopes of an improving global demand due to a potential US-China trade deal.

* Globally, US markets closed slightly higher after the Federal Reserve kept interest rates unchanged, as expected. Meanwhile, both Asian and European markets gained, driven by optimism over a potential US-UK trade deal and prospects of a trade negotiation agreement between the US and China.

Technical Outlook:

* Nifty Index opened positive but slipped in the first hour and was followed by some consolidation in the first half. It was followed by the index drifting lower to 24150 zones as India VIX spiked on account of geopolitical concerns.

* It formed a bearish candle on daily frame and has been making lower highs from the last four sessions as some rub off and pressure can be seen at higher levels. Now till it holds below 24450 zones weakness could be seen towards 24150 then 24050 zones while hurdles can be seen at 24500 then 24650 zones.

Derivative Outlook:

* Nifty future closed negative with losses of 1.04% at 24207 levels. Positive setup seen in Coforge, Canara Bank, CG Power, HCL Tech, Britannia, Axis Bank, ICICI Bank, LTI Mindtree, Kotak Bank, BSE, Titan, APL Apollo and Ramco Cements while weakness in Siemens, Torrent Power, Jubilant Food, REC, Godrej Properties, Inox Wind, OFSS, Exide Industries, Laurus Labs, VBL and SAIL.

* On option front, Maximum Call OI is at 25000 then 24400 strike while Maximum Put OI is at 24000 then 23500 strike. Call writing is seen at 25000 then 24400 strike while Put writing is seen at 24000 then 24300 strike. Option data suggests a broader trading range in between 23500 to 25000 zones while an immediate range between 23800 to 24600 levels.

Global Market Updat

* European Market - European equities gained, snapping a two-day losing streak, after investor confidence was boosted by a likely US-UK trade deal, which US President Donald Trump is expected to announce later today. UK, Germany and France Index gain 0.5% each.

* Asian Market - Stocks in Asia climbed as signs of progress in trade negotiations supported sentiment, while recent strength in the region’s currencies also helped attract foreign flows.

* US Data - Initial Jobless Claims and Nonfarm productivity.

* Commodity - Oil rose after Donald Trump flagged a Thursday announcement on a trade deal, which is expected to be with the UK, as the US president faces political pressure following tariffs that rattled global markets. Brent climbed toward $62 a barrel after falling 1.7% in the previous session.

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