The Indian equity markets showcased notable resilience amid rising geopolitical tensions between India and Pakistan this past week. While markets initially consolidated, they ended the week with only a modest decline. The Nifty index traded in a relatively tight range of 23800-24600 marks, before closing with a net weekly loss of 338 points. Despite the downward move, the markets held above key support levels. However, volatility surged sharply, as reflected in the India VIX, which jumped by 18.49%, closing at 21.63 on a weekly basis.
In our previous analysis, we highlighted the 24,600–24,700 zone as a critical technical resistance level. This zone represents the 61.8% Fibonacci retracement of the overall market fall and holds significant importance. Additionally, the 200-day EMA, currently around the 23,600 mark, continues to act as a key support area. Technically, as long as the market remains below the 24,500–24,700 zone, a cautious outlook is warranted. A sustainable breakout above this resistance range is essential for fresh bullish momentum.
Market participants should continue to monitor the geopolitical developments closely. Bank Nifty also witnessed profit booking, registering a 2.5% decline for the week. It closed near its support level at 53,000. Immediate support is seen at 53,000, while resistance lies in the 56,000 zone. Looking ahead, if Bank Nifty sustains above 53,000, it may attempt a recovery toward the 54,000–54,500 levels. However, until a strong close above these levels is observed, a cautious trading approach is advisable.
Both Nifty and Bank Nifty have managed to close above their respective monthly support levels for Nifty: 23,600 and for Bank Nifty: 53,000. However, immediate resistance at 24,600–24,700 for Nifty and 56,000 for Bank Nifty will be crucial in determining further market direction. Fresh long positions should be considered only after a decisive breakout above these resistance zones.
Traders and investors are advised to maintain a cautious stance and closely track developments—both technical and geopolitical—in the coming week. Buy HAL at ₹4500-4525; Stop Loss at ₹4300; Target Price of ₹4800. Buy Sun Pharma at ₹1725-1745; Stop Loss at ₹1675; Target Price of ₹1830.
In a related development, a top military officer of Pakistan dialed India just before a ceasefire announcement on May 10, 2025. The Director Generals of Military Operations (DGMOs) of both sides spoke at 3.35 pm that day. An hour prior, India warned that any future act of terror by Pakistan would be considered an act of war. This warning was significant as Pakistan had been launching drone and missile attacks on military installations and civilian areas in northern India for the last three nights, all of which were intercepted by the robust Indian air defense network.
Wing Commander Vyomika Singh stated at a briefing, "Over the past few days, Pakistan suffered heavy and unsustainable losses after its unprovoked attack on Indian installations. There has been extensive damage to crucial Pakistani air bases like Skardu, Sargodha, Jacobabad, and Bholari. In addition, the loss of air defense weapon systems and radars made the defense of Pakistani airspace unsustainable. Across the Line of Control, there has been extensive and precise damage to military infrastructure and command control centers and logistic installations."
The latest conflict began with the killing of 26 tourists by Pakistan-linked terrorists in Jammu and Kashmir's Pahalgam. Following this, India launched precision cruise missile strikes at terror infrastructure in Pakistan and Pakistan-Occupied Jammu and Kashmir (PoJK). In response, Pakistan escalated the situation by attacking civilian areas in India with drones, prompting India's further strikes against selected military targets deep inside Pakistani territory, including radar installations, command and control centers, and ammunition depots in Rafiqui, Chaklala, Rahim Yar Khan, Sukkur, and Sialkot.
As of May 9, 2025, Indian equity markets closed sharply lower amid escalating tensions. The Sensex dropped 880.34 points, or 1.10%, to 79,454.47, while the Nifty 50 lost 265.80 points to end at 24,008. The Nifty Bank index declined by 770.40 points, or 1.42%, settling at 53,595.25. Market experts attributed the selloff to geopolitical concerns following Operation Sindoor, India’s response to the deadly terror attack in Pahalgam.
Looking ahead to May 12, 2025, market analysts are cautious as immediate support for Nifty is placed at 23,800, and a decisive break below this level could extend the decline toward 23,200. On the upside, any rebound is expected to encounter strong resistance in the 24,400-24,600 range. The India VIX on May 9 jumped 2.95 percent to 21.63 percent, indicating heightened market volatility.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, observed that a small green candle with a long upper shadow formed on the Nifty’s daily chart, indicating a potential downside breakout from the recent range. On the weekly chart, Nifty formed a bearish engulfing-type pattern, signaling a possible trend reversal. If the weakness continues, Nifty could slide toward 23,600, with immediate resistance at 24,200.
Key domestic triggers in the upcoming week include the release of important economic data such as the Consumer Price Index (CPI), Wholesale Price Index (WPI), and trade figures for exports and imports. Additionally, the corporate earnings season will gather pace, with several major companies scheduled to announce their quarterly results, including PVR INOX, Tata Steel, Bharti Airtel, Cipla, GAIL, Hero MotoCorp, Tata Motors, Lupin, Godrej Industries, and BHEL.
