Dalal Street set for another quiet start after India's strikes, US Fed's steady rates

Flat open expected as global and geopolitical cues keep sentiment cautious

A day after markets remained rangebound and largely unaffected following India’s strikes on nine terror targets in Pakistan and Pakistan-occupied Kashmir, GIFT Nifty trends pointed to another quiet start for markets on May 8. As of 7:21 am, it stood at 24,427, showing a flat-to-positive bias and indicating a muted start for Dalal Street.

Market experts believe that the markets may continue to show resilience despite the India-Pakistan border tensions, as they feel that India's measured response to Pakistan after the Pahalgam attacks has already been mostly factored in. There is also a prevailing expectation among investors that the situation will de-escalate.

Looking ahead, VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said that any further escalation should be avoided, as a full-blown war could hurt India’s overall economic health and have a negative impact on the markets.

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In latest update, Pakistan continued ceasefire violations along the LoC for the 14th day. Pakistan also continued heavy shelling along border areas for second day straight. India, meanwhile, has activated all air defence units along the India-Pakistan border to tackle any eventuality.

Globally, the scenario remains relatively stable, with the US Federal Reserve keeping interest rates unchanged. Comments by Jerome Powell underlined that uncertainty surrounding the US-China trade deal and mixed macroeconomic data are factors the markets are likely to keep an eye on.

"Given that foreign institutional investors (FIIs) have been net buyers in India for 15 consecutive days, the fact that Fed Chief Jerome Powell mentioned that significantly larger reciprocal tariffs are likely to lead to rising inflation, a slowdown in economic growth, and increased unemployment, could keep FIIs interested in continuing to invest in India," Vijayakumar added.

Today, the markets will also be closely watching a slew of earnings announcements, including those from L&T, Britannia, Titan, Pidilite, Biocon, Bharat Forge, Union Bank, and Canara Bank.

However, given that the current market texture is non-directional, traders may be waiting for a breakout on either side, noted Shrikant Chouhan, Head of Equity Research at Kotak Securities.

He identified 24,500 for the Nifty 50 and 81,000 for the Sensex as the immediate breakout levels. On the downside, a fall below 24,300 for the Nifty 50 or 80,500 for the Sensex could intensify selling pressure. If that happens, the market could retest the levels of 24,200 and 80,200, respectively.

Globally, US futures were relatively flat in response to the widely anticipated Federal Reserve decision, even as the central bank acknowledged growing concerns over inflation and unemployment.

The US Federal Reserve held its key interest rate steady in the range of 4.25 percent to 4.5 percent, where it has remained since December.

At the May meeting, Powell took a more direct stance than in March, placing the blame squarely on Trump’s tariffs. He stated that these tariffs “are likely” to result in higher inflation, slower economic growth, and increased unemployment—conditions that could lead to a stagflationary environment.

Overnight, the three major US indexes closed higher. The S&P 500 edged up during a choppy session, adding 0.43 percent, while the Nasdaq Composite gained 0.27 percent, and the Dow Jones rose 0.7 percent.

Meanwhile, Asia-Pacific markets were mixed this morning. Japan’s benchmark Nikkei 225 opened 0.28 percent higher, South Korea’s Kospi rose 0.36 percent, while Australia’s benchmark S&P/ASX 200 slipped 0.14 percent.