By V K Sharma
The Nifty closed 2.07% higher over the fortnight, as the nation took in stride the Pakistan-sponsored Islamic terrorism in Kashmir, the curtailment of diplomatic ties and the suspension of the 1960 Indus Waters Treaty with Pakistan.
For the week, the Nifty rose 1.28%, while the Bank Nifty edged up 0.83%. In contrast, smallcaps and microcaps declined by 0.64% and 2.4%, respectively. While large-caps are up, small-caps have taken a beating, indicating that small investors are nervous, with the sound of war drums heightening their anxiety.
But experience shows that markets often climb a wall of worry. They typically react with fear at the onset of a war or skirmish, but once conflict begins, markets tend to recover and rise. This pattern was evident during the first Gulf War, in Afghanistan, and during the Kargil War. For instance, after Squadron Leader Ahuja’s MiG-21 was downed by a shoulder-fired missile on May 27, 1999, in the Batalik sector of Kargil, the Nifty fell around 4%. However, it rebounded strongly, gaining over 30% by the time the war formally ended on July 26, 1999.
Now let’s look at the markets from a technical perspective. In the adjoining daily candlestick chart, note trendline number 51, which is drawn by connecting the high of 23,807 on February 5 and the high of 23,869 on April 25. The Nifty pierced through this trendline on April 21, creating a gap between 23,872 and 23,903. This gap was successfully filled on April 25.
Last Friday, the Nifty closed at 24,346 — its highest closing level in the calendar year 2025.
Trendline no. 51 was briefly violated on April 25 on an intraday basis, but the Nifty closed above it. As this is an upward-sloping trendline, the support, currently at 23,920, will continue to rise each day.
Friday’s high of 24,589 is the next resistance. In the last article, I had set a target of 25,650 for the inverted head and shoulders pattern, which is in place. In between the resistances are at 24,708 and 25,212.
Meanwhile, the US markets closed with solid gains on Friday. With Friday’s gain, the S&P 500 has extended its winning streak to 9 days, which is the longest in 20 years. It has also recouped all its losses since the announcement of the tariff.
The gains were driven by better-than-expected April non-farm payroll data and a long-awaited thaw in US-China trade talks. While Pakistan remains on tenterhooks, uncertain about when and where India might respond, the government is likely to stay vigilant against threats both external and internal. With global sentiment in India’s favour, there is hope that Pakistan may be effectively neutralised this time. Investors should remain confidently invested.
(The author is a veteran of the capital markets with over three decades of experience)
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