Indian markets experienced a reversal of early gains on Friday due to escalating geopolitical tensions following terror attacks in Kashmir, leading to profit booking. The Nifty and Sensex retreated, and analysts anticipate a short-term consolidation after a strong rally. The Sensex closed down 588 points, or 0.74%, at 79,212, while the Nifty fell 207 points, or 0.86%, to 24,039. Broader markets saw steeper declines, with the Nifty Midcap100 and Smallcap100 indices falling over 2.5% each. Except for Nifty IT, all sectoral indices closed in the red.

Sudeep Shah from SBI Securities suggests that the Nifty may enter a consolidation phase. The index had surged over 2,600 points in 12 trading sessions before pausing due to geopolitical tensions. Key technical support at the neckline of a double bottom pattern and the 8-day EMA helped the index recover slightly, closing the week with a modest gain of 0.79%. However, a small-bodied candle with a long upper shadow on the weekly chart indicates selling pressure at higher levels, and the flattening slope of short-term averages suggests waning momentum.

For Nifty, Shah identifies the 24,350-24,380 zone as a critical hurdle. A sustained move above 24,380 could trigger a rally to 24,600, followed by 24,850. Downside support lies in the 23,800-23,750 zone, with further support at 23,350 if the index slips below 23,750. For Bank Nifty, immediate support is in the 54,200-54,100 zone; a break below 54,100 could lead to a correction to 53,400. On the upside, the 55,500-55,600 zone is a key hurdle; a sustainable move above 55,600 could resume the uptrend, targeting 56,300 and then 57,000.

Nifty IT is outperforming, having surpassed its 20-day EMA for the first time since February 2025. The daily RSI is above 50 and trending upward, a bullish sign. Bank Nifty, after marking a fresh all-time high, experienced a throwback but found support at the 8-day EMA. However, a small body candle with upper and lower shadows on a weekly scale suggests indecision.

Regarding individual stocks, HDFCBANK has seen a minor pullback but remains above its short and long-term moving averages, suggesting consolidation. ICICIBANK experienced a pullback after hitting 1436, finding support near the 23.6% Fibonacci retracement level and 20-day EMA; a move above Rs 1,420 could resume its upward trajectory. BHARTIARTL is undergoing a throwback with below-average volume activity, with the zone of Rs 1,790-1,780 expected to act as crucial support.

FIIs have been net buyers for the last eight trading sessions, reflecting confidence in Indian equities. The FII long-short ratio in index futures stands at 37.63%, indicating a moderately cautious stance with gradual unwinding of short positions and buildup of long positions.

Based on roll-over data from the April Expiry, potential outperforming sectors include Private Banks, Financial Services, PSU Banks, Cement, Chemical, Capital Market, Defense, Automobile, Pharma, Healthcare, and Oil & Gas. Potential underperforming sectors include Metal and Realty.