Investors likely to remain cautious on implications of Middle East tensions

Investors are likely to remain cautious in the near term due to concerns about the long implication of geopolitical tensions in the Middle East, says Vinod Nair, the Head of Research at Geojit Financial Services.
We expect volatility to persist, although long-term investors will find bargain hunting opportunities due to an optimistic Q2 FY24 earnings estimate and a festival-driven demand environment, he said.

Market participants will vigilantly monitor US GDP data for insights into the Fed's interest rate trajectory. Additionally, as the earnings season gains momentum, investor sentiment will be shaped by corporate's management commentary and bottom-up investment approach, he said.

Middle East tensions and elevated US bond yields steered the market to a consolidation path this week. A weak start to the earnings season, disappointment from the IT sector, and a mixed bag of results from banks influenced investors to book profits from the table. FIIs continued to withdraw funds as the US Fed Chair emphasised the imperative for continued monetary tightening policy and hold interest rate high, he added.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said the banking sector will be in focus on Monday as investors would react to Q2 results of ICICI and Kotak Bank that would be announced over the weekend. Among the key results to be announced next week would be from Axis Bank, TechM, Maruti, Bajaj Finserv, SBI Life and Dr Reddy's.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities said the short term trend of Nifty remains negative. A slide below the immediate support of 19,480 could drag Nifty towards another important support of 19,350 levels in the near term. Immediate resistance is placed around 19,650 levels.