The market is showing vulnerable movements due to rising tensions between India and Pakistan over the Pahalagam attack. Yesterday, on Friday trade setup, the market fell nearly 200 points, closing near 24,039.35. It made a low of around 23,845, effectively retesting one of the most important levels, which has now become a support at 23,869.
The market opened positively with a gap-up and touched the previous high of around 24,365. After that, it witnessed a sharp fall, touching nearly 23,850 levels. Following this drop, the market saw a slight bounce back, eventually closing between 23,900 and 24,039.35.
Global Market Analysis
The trade deal between India and the US is gaining further strength, as the US Treasury Secretary recently stated that India could be the number one country to finalize a trade deal with the US. This development could be highly beneficial for India. It appears that there are ongoing discussions that could lead to an initial agreement, followed by a second phase involving additional products and sectors.
This process is unfolding as recent comments have highlighted progress. Meanwhile, the US has also mentioned being in talks with China to ease trade restrictions. However, China has denied being involved in such negotiations.
From the perspective of the Indian economy, finalizing a trade deal with the US as soon as possible would be highly advantageous. Additionally, if the US does not strike a similar deal with China, it would further benefit India’s supply and demand dynamics, strengthening India’s position in global trade. Overall, this could be a very positive development for India’s long-term economic outlook.
Regarding the Russia-Ukraine situation, Trump has stated to Zelensky that Crimea would be recognized as part of Russia. This is a very significant statement, considering Crimea was taken under Russian control during the 2014 Ukraine invasion. If this recognition happens, it could be highly beneficial for the Russian economy and would serve as a major boost to Russia’s position. It remains to be seen how decisions will unfold in the coming times and what appropriate steps will be taken.
Domestic market analysis
India – Pak conflict escalation
The escalating tension between India and Pakistan is currently a major concern for the market and is being closely watched under a cautious outlook. India might take military action against Pakistan in response to the Pahalgam attacks that occurred on April 22. The key focus now is on how India will respond, how Pakistan will react, and what the outcomes from both sides will be. This situation is crucial.
If the tension escalates further, it could severely impact the Indian market. The main concern is that it could hurt future investments by companies, potentially causing them to halt expansion plans. Additionally, FIIs (Foreign Institutional Investors) might downgrade India’s investment outlook, reducing their investments in the country.
Many analysts suggest that the Modi government is unlikely to take aggressive military steps at this time, especially considering the ongoing US-China trade war tensions. India currently has a golden opportunity to strengthen its global position, and getting involved in a conflict could risk losing that advantage.
Ultimately, while some form of action from the Modi government is expected, the manner and scale of the response remain to be seen. The situation will need to be monitored very cautiously.
Apple manufacturing shift
Apple might shift most of its U.S. iPhone production to India, according to a report by Reuters. India is expected to be a major beneficiary of the ongoing U.S.-China trade war. Apple has indicated that both Foxconn and Tata plan to expand iPhone production for U.S. supply from India.
This would be a significant boost for Indian manufacturing. If major companies like Apple establish a strong presence in India’s manufacturing sector, it would not only enhance India’s global branding but also attract more multinational companies to invest in India as a manufacturing destination.
If these developments continue, India will undoubtedly benefit from the trade war, which is a very positive sign. Meanwhile, Huawei has recently reported sustainable growth of around 6.5%, making it one of the few major economies to maintain steady growth amid global tensions.
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FII & DII ACTIVITY
Even with escalating tensions between India and Pakistan, FIIs (Foreign Institutional Investors) continue to show confidence in the Indian equity market. They bought nearly ₹2,952 crore, marking the ninth consecutive day of positive buying in Indian equities. Meanwhile, DIIs (Domestic Institutional Investors) also remained positive, purchasing around ₹3,539.85 crore.
Despite this strong institutional buying, the Nifty still closed nearly 200 points lower. This suggests that the market correction was largely driven by speculative selling due to concerns over the India-Pakistan tensions rather than fundamental weakness.
Option chain analysis
Option writers are currently in a cautious mood, as the market could move in either direction. Analyzing the option chain data, we see significant call writing at the 24,200 strikes, with 66,389 contracts open. Additionally, at the 24,300 strikes, there are 91,473 contracts, indicating strong resistance being built by call writers.
Nifty 50 prediction for tomorrow trade setup
This suggests that 24,300 could act as a major hurdle for Nifty in the upcoming trade setup. On the support side, the 24,000 strike shows a strong base with 76,343 contracts, while the 23,900 strike has around 48,696 contracts — a relatively lower open interest.
Therefore, we might expect the market to move within the 24,200 to 23,900 range in the near term, with 24,300 acting as a key resistance and 24,000 serving as a major support.
Conclusion
Everything is in a cautious mode right now, as the key factor for the upcoming trade setups will be how India responds to the ongoing conflict with Pakistan. India is increasingly engaging in diplomatic meetings with foreign ambassadors and officials, making moves against Pakistan. How India proceeds will be crucial for market sentiment.
Another important consideration is that if Pakistan doesn’t retaliate significantly, the ongoing upward movement in Nifty could continue. However, until then, the market remains in a vulnerable state, with the potential for both upward and downward movements.
