Flat opening seen for Indian stocks amid global tension
Gift Nifty trades near 24,000 ahead of Monday’s session as renewed geopolitical risks, elevated oil prices and US Treasury yields weigh on sentiment.
Indian stock markets are expected to open on a weak note on Monday, amid escalating tensions between the United States and Iran. The Nifty is currently trading at 24,000, slightly lower than its Friday close of 24,048. Analysts anticipate the market to remain range-bound, with global sentiment being the primary driver. Ajit Mishra, SVP of Research at Religare Broking Ltd, highlights renewed geopolitical tensions and rising crude oil prices as the biggest challenges for Indian equities.
Brent crude oil prices surged by 8% last week, hovering close to $95 per barrel, due to heightened concerns over potential energy supply disruptions in the Strait of Hormuz. Fed Governor Christopher Waller's recent dovish comments temporarily eased expectations of an immediate rate increase, supporting a brief rally in global equities.
However, the latest U.S. employment figures, showing a larger-than-expected gain in non-farm payrolls, have left the Federal Reserve's policy outlook uncertain. Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, suggests that the broader market direction will be closely tied to global macro variables. If crude oil prices and U.S. Treasury yields remain elevated, the upside for Indian equities may be limited.
Conversely, a decline in both crude and bond yields, along with the Nifty staying within the 23,800–23,600 support zone, could pave the way for another market recovery. Investors are closely monitoring the Indian rupee, which has strengthened recently due to robust foreign currency inflows and ongoing RBI support. India's foreign exchange reserves now stand at a record $740.8 billion, offering the central bank a significant buffer to handle currency volatility in an uncertain global environment.
Three key indicators for investors in the current market scenario, according to Rahul Singh, CIO at Tata Asset Management, include improving corporate earnings, particularly in sectors surpassing market expectations, the return of foreign investor flows, and the persistent pipeline of IPOs, institutional share sales, and block deals, which are absorbing investor capital and potentially keeping markets range-bound in the near term.
Singh remains optimistic about banking and financial services, seeing opportunities in healthcare, while remaining cautious about the information technology sector as its growth outlook evolves. Singh advises investors to adopt a selective and diversified approach, guided by their financial goals, investment horizon, and risk appetite.
Depending on individual requirements, investors may consider Flexi Cap, Multi Cap, Multi Asset Allocation, and Balanced Advantage Funds, while sector-focused funds should be considered only by those familiar with the associated concentration risks.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
