D-Street Declines for Third Consecutive Week Amid West Asia Deal Delays and Rising Oil Prices.

India’s equity markets concluded a challenging trading week with both the NSE Nifty and BSE Sensex posting marginal declines. The Nifty dipped 29.85 points, or 0.1%, closing at 24,366, while the Sensex fell 70.71 points, also down 0.1%, to end at 78,009.25. Over the week, the indices experienced a drop of 0.8% and 0.6%, respectively, extending a trend of losses observed over the previous two weeks. This downturn is largely attributed to ongoing geopolitical uncertainties, particularly surrounding the delayed US-Iran deal, alongside a notable increase in crude oil prices, with Brent crude futures trading above $88 per barrel.

Market analysts, including those from Motilal Oswal Financial Services, indicated that the subdued performance of benchmark indices correlates with these geopolitical tensions and rising oil prices, which exert downward pressure on investor sentiment. The volatility index, or VIX, which reflects market fear, fell slightly by 0.9% to 11.3, suggesting a limited degree of relief among traders. In the broader market, out of 4,502 stocks traded, 1,896 advanced while 2,393 declined, further exemplifying the sector-specific nature of market activity during this period.

From a technical perspective, the Nifty index is flanking the confluence of its 100-day and 200-day Exponential Moving Averages, with immediate support identified around the 24,130-24,000 range and resistance at 24,620-24,700. Analysts suggest that unless the index decisively breaks above 24,700, the potential for a sustained upward rally remains limited, keeping the index confined to a range of 24,000 to 24,700 in the near term. Notably, earnings growth remains robust within the mid- and small-cap segments, outshining the Nifty50, which may indicate continued relative strength in broader market sectors moving forward.

In terms of investor activity, foreign portfolio investors displayed a positive sentiment by net purchasing shares worth ₹508 crore. Domestic institutional buyers also entered the fray, acquiring ₹356 crore worth of equities. This influx of capital could support the market’s ability to bounce back if bullish patterns emerge, particularly as earnings reports are released and further market direction becomes clearer. Overall, investors should remain vigilant of geopolitical developments, oil price trends, and the ongoing earnings season, as these factors will likely dictate market movement in the near future.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)