Will Market Volatility Persist Amid Geopolitical Tensions and Q4 Earnings?

Mumbai, May 3 (NationPress) - The benchmark indices concluded with slight gains during a notably volatile session on May 2. Analysts anticipate that this volatility will persist due to ongoing geopolitical conflicts, tariff developments, and the approaching Q4 earnings season along with significant US economic indicators.

On Friday, the Nifty opened robustly and peaked at an intraday high of 24,589 in the initial half of the session. However, profit booking at elevated levels negated those gains, resulting in the index closing nearly unchanged.

The Nifty wrapped up the day with an uptick of 12.50 points, or 0.05 percent, at 24,346.70.

“For the week, the BSE Sensex increased by 1.6 percent, while the Nifty50 ascended by 1.2 percent. Conversely, the BSE Midcap index dipped by 0.4 percent and the Smallcap index remained flat,” noted Bajaj Broking Research.

In terms of sector performance, media, energy, IT, and oil & gas sectors posted gains ranging from 0.3 to 0.7 percent. In contrast, power, metal, telecom, pharma, real estate, and consumer durables sectors experienced declines between 0.5 and 2 percent.

Dhupesh Dhameja, a Derivatives Research Analyst at SAMCO Securities, commented that the Nifty continues to show signs of uncertainty at high levels, frequently retreating from important resistance zones and generating intraday fake-outs, indicating a phase of consolidation amid diminishing momentum.

This marks the seventh consecutive session where the Nifty has been trapped in a volatile range, struggling to breach overhead resistances, reflecting ongoing supply pressure and a cautious sentiment in the broader market.

Looking ahead, the Nifty is predicted to maintain consolidation within the range of 24,550-23,800, with 23,800 being the intersection of last week’s low and the recent breakout area. Meanwhile, 24,550 represents the 61.8 percent retracement of the entire decline (26,277-21,744),” according to Bajaj Broking Research.

“We believe that the ongoing consolidation will enable the index to alleviate the overbought conditions arising from the recent strong rally. Stock-specific movements will continue to be significant as we navigate through the Q4 earnings season,” they added.

The Bank Nifty Index is observed to be consolidating within a 2,000-point range over the last six sessions following a robust rally of 5,500 points or 11 percent in the prior six sessions.

“Only a sustained movement above the recent high of 56,098 could trigger further upside towards the 56,800 levels in the upcoming weeks. On the downside, key support is identified between 54,000-53,500, which aligns with the gap-up region and the previous significant breakout zone,” analysts stated.