Why Did Nifty and Sensex Start the Day Lower?
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Synopsis
On May 9, the Indian stock market opened lower, reflecting investor caution amid rising geopolitical tensions between India and Pakistan. Discover how these developments are affecting market dynamics and what analysts predict for the future as we navigate this uncertain environment.
Key Takeaways
- Indian indices opened lower as geopolitical tensions rise.
- Sectoral declines observed in auto, IT, and financial services.
- Expert analysis suggests support levels for Nifty at 24,000.
- FIIs maintained a strong buying trend.
- Investors are advised to adopt hedged strategies.
Mumbai, May 9 (NationPress) The leading indices in India commenced the day on a lower note on Friday, as anticipated, due to escalating tensions between India and Pakistan.
As of 9:23 am, the Sensex dropped by 529 points or 0.66 percent to reach 79,805, while the Nifty saw a decline of 207 points or 0.85 percent, settling at 24,066.
Additional selling pressure was evident in midcap and smallcap stocks, with the Nifty midcap 100 index decreasing by 509 points or 0.96 percent to 52,719 and the Nifty smallcap 100 index tumbling by 232 points or 1.44 percent to 15,951.
“Following a negative start, Nifty could find support at 24,000, subsequently 23,800 and 23,700. On the upside, 24,300 might act as immediate resistance, with 24,400 and 24,500 following,” stated Hardik Matalia from Choice Broking.
Sector-wise, indices such as auto, IT, financial services, pharma, FMCG, realty, and energy were among the most significant laggards.
Within the Sensex category, top gainers included Titan, L&T, Tata Motors, and Asian Paints. Conversely, significant losses were observed in Power Grid, UltraTech Cement, ICICI Bank, HDFC Bank, HCL Tech, Tata Steel, Bajaj Finance, Bajaj Finserv, Sun Pharma, HUL, and Bharti Airtel.
The current uncertainty continues to instill caution among traders, potentially overshadowing the prevailing trend amidst ongoing geopolitical tensions.
“Until the volatility, as reflected by the heightened India VIX, subsides, we suggest adopting a hedged strategy to navigate the prevailing conditions, focusing on stock selection,” remarked Ajit Mishra – SVP, Research, Religare Broking.
Asian markets displayed mixed performance, with Tokyo, Bangkok, and Jakarta trading positively, while Shanghai and Hong Kong faced declines.
The US markets concluded with gains owing to favorable developments concerning trade tariffs.
Foreign Institutional Investors (FIIs) maintained their buying streak for the 16th consecutive session on May 8, acquiring equities worth Rs 2,007 crore. In contrast, Domestic Institutional Investors (DIIs) sold equities worth Rs 596 crore on the same day.
Reports indicate that the Pakistan armed forces initiated multiple assaults utilizing drones and other munitions along the entire Western border on the night of May 8 and May 9, according to Indian Army officials. The drone strikes were successfully countered, and a suitable response was provided to the ceasefire violations, stated the Indian Army.
Point of View
I believe that the ongoing geopolitical tensions are a significant factor influencing market behavior. While it's vital to remain cautious, it's equally important to recognize the resilience of the Indian economy and the opportunities that lie ahead. Staying informed and strategic in our investments will guide us through these challenging times.
NationPress
20/05/2025
Frequently Asked Questions
What caused the drop in Nifty and Sensex?
The decline in Nifty and Sensex is attributed to escalating geopolitical tensions between India and Pakistan, prompting caution among investors.
Which sectors are most affected by the current market conditions?
Sectors such as auto, IT, financial services, pharma, FMCG, realty, and energy are currently facing significant selling pressure.
What is the recommended strategy for investors during this period?
Experts recommend maintaining a hedged strategy focusing on stock selection to navigate the ongoing market volatility.
How did foreign institutional investors behave recently?
Foreign institutional investors continued their buying spree for the 16th consecutive session, purchasing equities worth Rs 2,007 crore on May 8.
What recent actions were taken by the Pakistan armed forces?
The Pakistan armed forces launched drone and munitions attacks along the Western border, which were effectively countered by the Indian Army.
