Market volatility to stay due to geopolitical tensions, Q4 earnings season: Analysts

Mumbai: Benchmark indices ended with marginal gains in a highly volatile session on May 2 and volatility is expected to stay elevated due to ongoing geopolitical tensions, developments related to tariffs, and the unfolding Q4 earnings season and major US economic data points, analysts said on Saturday.

The Nifty on Friday opened strong and surged to an intraday high of 24,589 in the first half of the session. However, profit booking at higher levels erased those gains, leaving the index to close nearly flat.

The Nifty finished the day up 12.50 points, or 0.05 per cent, at 24,346.70.

“For the week, the BSE Sensex gained 1.6 per cent, while the Nifty50 rose 1.2 per cent. The BSE Midcap index declined 0.4 per cent and the Smallcap index ended flat,” said a note from Bajaj Broking Research.

Among sectoral performers, media, energy, IT, and oil & gas posted gains of 0.3–0.7 per cent. On the other hand, power, metal, telecom, pharma, realty, and consumer durables sectors saw losses ranging from 0.5 to 2 per cent.

According to Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities, Nifty continues to display signs of hesitation at elevated levels, repeatedly getting knocked back from crucial resistance zones and producing intraday fake-outs, indicating a period of consolidation amid fading momentum.

This marks the seventh consecutive session where Nifty has been locked in a choppy range, failing to conquer overhead resistances, underscoring persistent supply pressure and an undercurrent of caution in the broader market mood.

Going ahead, Nifty is expected to extend consolidation in the range of 24,550-23,800. With 23,800 being the confluence of last week’s low and recent breakout area. While 24,550 is the 61.8 per cent retracement of the entire decline (26,277-21,744),” according to Bajaj Broking Research.

“We believe the current consolidation will help the index work off the overbought condition developed after the recent strong rally. Stock specific action will continue to remain in focus as we progress through the Q4 earnings season,” it added.

Bank Nifty Index is seen consolidating in a 2,000 points range in the last 6 sessions after the recent strong rally of 5,500 points or 11 per cent in the preceding 6 sessions.

“Only a sustained move above recent high of 56,098 could trigger further upside toward the 56,800 levels in the coming weeks. On the downside, key support is seen between 54,000-53,500, which corresponds to the gap-up region and the previous significant breakout zone,” said analysts.

—IANS