Geopolitical uncertainty dampens investor confidence, Sensex, Nifty set to open weak

Domestic markets are expected to open weak on Tuesday as war clouds continue to shake investors’ confidence across the globe. Gift Nifty at 22,137 indicates a further 220 points, as NIfty April futures closed at 22,357 on the NSE on Monday.

Amit Goel, Co-Founder and Chief Global Strategist at Pace 360, said geopolitical uncertainty had triggered a sell-off across sectors, negatively impacting investor sentiment.

“However, Iran attacking Israel was well anticipated and discounted by global markets. We believe this attack will not result in any significant escalations in the Middle East. Hence, we do not see that as a major factor that could play out in the global markets,” he added.

However, as markets are overvalued and overstretched, valuations are rich. We advise investors to book their profits and refrain from investing, he advised investors due to a sizable correction in the markets.

Meanwhile, India’s goods exports hit a 12-month high of $41.68 billion in March, though it constituted a 0.67% decline from the corresponding month’s tally last year, while imports dropped 6% to $57.3 billion last month.

Aditi Nayar, Chief Economist, Head Research and Outreach, ICRA Ltd., on Trade Data, said: “Led by a larger YoY decline in merchandise imports vis-à-vis such exports, India’s merchandise trade deficit eased to an 11-month low of $15.6 billion in March 2024, while also trailing the levels seen in the year-ago month, amid a halving of gold imports and a fall in non-oil non-gold imports. This is expected to augur well for the current account number in Q4 FY2024, which may witness a small, transient surplus of ~$1-2 billion in the quarter.”

According to domestic brokerage Asit C Mehta, from a technical perspective, the index is consolidating in a rising channel pattern on the daily scale, while on the weekly scale, it has formed a shooting star pattern. “The lower boundary of the channel pattern is situated around 22,000 levels, making it a significant support level. Overall, we anticipate the index to trade within the range of 22,000 to 23,000 ahead of Q4FY24 earnings, with an immediate hurdle at 22,500.”

The Nifty Bank index closed the day in the negative zone, around 47,773 levels. Technically, the Bank Nifty index has formed a doji candlestick pattern on the weekly scale and maintained a position below the low of the doji candle, indicating short-term weakness. Short-term support levels for the Bank Nifty are observed at 47,000 and 46,400, with resistance levels at 48,000 and 49,060, it added.