West Asia tensions cloud market outlook, Nifty may stay rangebound
In a week marked by market stagnation, Indian equity indices closed on an unremarkable note, affected by geopolitical uncertainties and elevated crude oil prices. Experts forecast that without any significant triggers, the Nifty may continue its rangebound trajectory. Crude oil prices consistently stayed above ninety dollars a barrel, with foreign portfolio investors offloading shares while local…
Indian equity indices closed the week with a lackluster performance as geopolitical tensions in West Asia and rising crude oil prices continued to influence market sentiment. The Nifty, led by NSE, increased by 20.15 points or 0.1% to finish at 24,252, while the BSE's Sensex remained unchanged at 77,540.83. Over the week, the indices experienced declines of 0.5% and 0.6%, respectively, following a marginal drop in the previous week.
US-Iran tensions persisted, causing markets to trade in a narrow range, according to Sunny Agrawal, head of research at SBI Securities.
Agrawal indicated that the U.S. Federal Reserve's intervention to reduce 30-year U.S. bond yields offered some short-term relief, coupled with better-than-expected earnings season results, with most companies reporting double-digit revenue and profit growth. However, the escalation in geopolitical disputes pushed Brent crude oil futures above $94 a barrel, maintaining prices above $90 throughout the week.
Analysts suggest that the Nifty may remain in a 24,000-24,500 range, with any positive geopolitical developments or a reduction in oil prices being closely watched over the weekend. Should these factors not materialize, the Nifty is expected to continue trading within a sideways pattern. Ruchit Jain, head of equity technical research at Motilal Oswal Financial Services, emphasized that crude oil prices remain the primary concern for the market.
A potential drop in oil prices could trigger a break above the Nifty's resistance level of 24,500-24,600.
The Nifty Volatility Index climbed 4.1% to 11.2 on Friday, suggesting some caution among investors. Nifty Midcap 150 rose by 0.1%, while Nifty Small-cap 250 increased by 0.4%. Among the 4,564 stocks traded on Friday, 2,177 advanced and 2,152 declined at the close. The midcap index remained flat for the week, while Smallcap 250 gained 0.7%.
Recent volatility has seen the Nifty correct from its recent highs, failing to surpass the previous day's highs for 12 straight sessions. However, a mid-week resurgence has seen the index respect its 24,000 support level. Historically, Nifty has formed higher bottoms in every correction since March, indicating a positive trend for the market.
Elsewhere, Asian markets saw a decline in Japan by 0.3%, a flat performance in China, and gains in Hong Kong (1.2%), South Korea (0.9%), and Taiwan (0.7%). The Stoxx 600 pan-European index increased by 0.2% at the time of publication. Foreign portfolio investors sold shares worth ₹543 crore, while domestic institutions bought shares worth ₹2,124 crore.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
