The upcoming trading session on Friday is expected to open deep in the red, with early indicators from the Gift Nifty pointing to a sharp gap-down for Indian equity benchmarks.
Investor sentiment has been shaken by rising geopolitical tensions after Pakistan launched drone strikes across Jammu and Kashmir, and reportedly targeted military sites in Punjab, Rajasthan, and Gujarat.
India responded with strong military retaliation, intensifying fears of a broader conflict between the two nuclear-armed neighbours. The heightened uncertainty is likely to weigh heavily on domestic markets at the open, with risk-off sentiment prevailing across global cues.
At 2.13 am, the GIFT Nifty Futures traded at 23,880.5 , down 2.2% or 537.50 points, suggesting a sharply lower open for headline indices. However, by morning, the GIFT Nifty futures had pared half of its losses. At 7.24 am, the GIFT Nifty Futures traded at 23,974 , down around 1% or 215 points.
Rocked by the worsening conflict between India and Pakistan, American Depository Receipts of most Indian companies listed on the NYSE tanked in trade, pointing towards heightened risk aversion among investors. ADRs of Dr Reddy’s Labs, Wipro, Infosys, ICICI Bank, HDFC Bank and Axis Bank, all of which also have counterparts in the Nifty 50 index, lost 2-5%. On the other hand, ADRs of Genpact, WNS Holdings, and MakeMyTrip plunged up to 15%.
Meanwhile, the rising risk aversion in the market was also reflected in the technical setup seen at today’s market closing. Rupak De, Senior Technical Analyst at LKP Securities, noted that the Nifty 50 closed with a Dark Cloud Cover candlestick pattern, signalling growing fear among traders.
He pointed out that the index had recently faced resistance near the 24,550 level, and the overall sentiment now appears weak, hinting towards a possibility of further correction in the near term. According to De, immediate support is located at 23,950, and a break below this could open the path toward 23,450. On the upside, resistance levels are seen at 24,400 and 24,550.
The India VIX, often referred to as the fear index jumped 10% to 21.01 in the last session, hinting towards a sharp rise in investor anxiety. The surge in the so-called "volatility gauge" comes amid mounting uncertainty, largely fuelled by escalating geopolitical tensions and concerns over near-term market stability.
Indian equity markets closed lower in the last session, after a volatile trade, as rising geopolitical tensions and the expiry of weekly derivatives contracts triggered broad-based selling.
The Nifty began the day on a positive note, opening marginally in the green on the back of strong global cues. However, sentiment soon weakened by the afternoon session, with the index falling by more than 200 points amid reports of escalating tensions between India and Pakistan. Although the Nifty recovered some ground towards the close, it still ended the day with a loss of 140 points, or 0.58%, finishing at 24,273.
