Indian Market Volatile after geopolitical tension between India and Pakistan
Volatility shoots up as it inches up by 10% amid rising concerns on Geopolitical front though market sustains the lower levels with Nifty sustaining the 10800 levels. A gap down open amid the Surgical strike by IAF caused traders to be pounded by negative sentiments but Nifty managed to recover quickly from lower levels.
The markets may not respond negatively since we do not have that kind of trades with our neighboring country like Pakistan. We believe this will be a non-event for the market since when we look at history we see wars that have been extended to 3 months of time. So that was a different time and in fact at that point of time, Indian Nifty managed to fetch a 35% return.
At this point in time, we believe the markets are in the range of 10980 - 10700. The volatility index is, of course, up by 11% which indicates the volatility is there and some kind of panic is inherent in the market. Hence traders should keep a check at lower levels of Nifty which are placed at 10750 - 10720. Traders should look for some kind of hedging using put options.
From here, we believe there may be some consolidation in Nifty between 10900 - 10750 for coming sessions as the rise in volatility has indicated traders rushing for Puts and hedging their positions. There may be further escalations on the geopolitical front and hence we suggest traders to keep the portfolio's intact with a Tight SL and hedging using options.
Amid this, investors and traders are also awaiting GDP and infrastructure data that is due on 28th Feb. That may dictate the medium trend of Nifty.
On Global front, Drop in Crude oil post-Trump's comment has capped the upside of crude at $57 mark which is favorable to India as an economy which is one of the biggest importers of crude.