West Asia tensions cloud market outlook, Nifty may stay rangebound
NSE’s Nifty rose 20.15 points or 0.1% to close at 24,252. BSE’s Sensex ended flat at 77,540.83 on Friday. The indices declined 0.5% and 0.6% for the week, respectively, after ending marginally lower in the previous week as well.
“The US-Iran geopolitical tensions continued to weigh on markets this week, resulting in subdued trading and range-bound moves,” said Sunny Agrawal, head of research at SBI Securities.
Agrawal said the US Fed’s intervention to cool 30-year US bond yields provided some interim relief during the week, while the results season wrapped up far better than expected, with most companies delivering double-digit revenue and PAT growth.
The escalation in geopolitical talks took Brent crude oil futures to over $94 a barrel on Friday evening, and prices were above the $90 mark for the entire week.
AgenciesMarket drift Indices end marginally lower for a 2nd week; Volatility rise reflects D-St caution; Nifty likely to trade in 24,000–24,500 range in absence of fresh triggers or a fall in oil prices
“We will continue to watch for any positive geopolitical developments or a cooling off in oil prices over the weekend,” Agrawal said. “If not, the Nifty is likely to remain in the 24,000-24,500 range and see news flow-driven moves.”
Ruchit Jain, head – equity technical research, Motilal Oswal Financial Services, said going ahead, crude remains the market’s biggest worry. “If it starts to cool off, the Nifty may soon break past its near-term resistance of 24,500-24,600,” he said.
Nifty’s Volatility Index rose 4.1% to 11.2 Friday, indicating some caution among market participants. Nifty Midcap 150 gained 0.1% and Nifty Small-cap 250 rose 0.4%. Of the total 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 rose 0.7%.
“We saw the Nifty recently correct from its recent highs, with the index failing to surpass the previous day’s highs for 12 straight sessions,” said Jain. “However, mid-week, the index started rising again and has respected its 24,000 support. In every correction since March, the Nifty has formed higher bottoms, which remains a positive sign,” he said.
Elsewhere in Asia, Japan fell 0.3%, China remained flat, while Hong Kong rose 1.2%, South Korea gained 0.9% and Taiwan rose 0.7%. The pan-Europe index Stoxx 600 was up 0.2% at the time of going to print. Foreign portfolio investors net sold shares worth ₹543 crore. Domestic institutions were buyers to the tune of ₹2,124 crore.
