The fresh week started on a green note at Dalal Street, thanks to positive global cues and steady buying by foreign portfolio investors. Gift Nifty at 24,220 signals a gap-up opening of about 80 points for the Nifty. According to analysts, the market will remain in consolidation mode in this holiday-curtailed week. The focus will be on corporate results announced by India Inc. So far, the results are largely in line with expectations. The market will remain closed on May 1 (Thursday).
“The Nifty50 has witnessed a sharp short-covering rally, surging from 21,800 to 24,100 in just two weeks. However, with rising geopolitical tensions involving Pakistan and ongoing global trade uncertainties, we expect equities to trade largely within a range, with limited room for further upside,” said IFA Global Research.
However, institutional backing will keep the market in a consolidation phase, said analysts. According to an SBI Capital Markets report, both FIIs and DIIs were net buyers in the cash market last week to the tune of ₹17,344 crore and ₹1,132 crore, respectively. “In the short term, volatility is likely to persist in the market as investors will continue to focus on the trade tariff war, corporate earnings, and, more recently, the aftermath of the Pahalgam terror attack on the market,” it added.
Global equities continued to witness a relief rally on expectations of a ramp-down in US tariffs, even as messaging from the US government remained mixed, said Shrikant Chouhan, Head of Equity Research at Kotak Securities. “Indian markets witnessed a sharp rotation, with the IT sector outperforming sharply after a period of large underperformance over the past few weeks. Market sentiment remained hopeful as investors focused more on optimistic management guidance, while Q4FY25 earnings were slightly ahead of muted expectations, with banks, insurance, and select IT companies delivering ahead of our projections,” he said, adding that FPI flows are expected to remain volatile.
Technical analysts are cautioning investors about a possible trend reversal.
From a technical perspective, signs of weakness had already begun to emerge, said Mandar Bhojane, Equity Research Analyst. “The Nifty formed a Hanging Man pattern on April 23, often regarded as an early signal of trend reversal. This bearish signal was confirmed on April 24, when the index reversed sharply from a high of 24,359.30. In the latest session, a strong bearish candle has been formed, reinforcing the view of a possible short-term downtrend or a consolidation phase.”
Momentum indicators are also flashing caution, he said, adding, “A bearish divergence has appeared on the daily chart, suggesting that upward momentum is fading despite recent highs. Additionally, the Stochastic RSI has shown a bearish crossover from the overbought zone, further supporting the reversal narrative. These signals collectively hint that the bulls are losing grip and a corrective phase could be underway.”
Published on April 28, 2025
