Will Sensex and Nifty Rebound on Monday? Five Key Factors, Including Iran Peace Deal Risks, to Influence D-St Movements This Week!
The Indian equity market faced a notable setback at the end of the week, halting a five-day winning streak as benchmark indices experienced considerable declines. The Sensex slipped by 607 points to close at 76,802.90, while the Nifty50 decreased by 155 points, settling at 24,013.10. This downturn was largely attributed to selling pressure in IT stocks, adverse global cues, and rising geopolitical uncertainties, notably related to U.S.-Iran negotiations following recent conflicts. The market sentiment has been influenced by these factors, following previous strong gains of approximately 5% over the last five trading sessions.
One significant factor to monitor is the precarious state of the U.S.-Iran peace negotiations, as discussions in Switzerland appeared on the brink of collapse following conflicting reports regarding the Strait of Hormuz. With the potential for escalated tensions in the Middle East, Brent crude prices increased, indicating a volatile outlook for oil markets, which could have broader implications for inflation and currency stability in India. As oil prices are closely linked to economic performance, any sustained rise may impact interest rates and overall fiscal policy.
The IT sector particularly bore the brunt of this week’s market decline, with major firms such as Infosys and TCS witnessing drops of up to 7%. The downturn was exacerbated by a sharply reduced revenue growth forecast from Accenture, signaling potential weakness in global demand for IT services. Technical indicators suggest that the Nifty is currently under bearish pressure, with critical support levels identified at 27,000 and resistance at 28,250. A sustained move below these levels would likely increase negative sentiment, while any recovery will hinge on overcoming near-term resistance thresholds.
Additionally, the rupee maintained a relatively stable position against the US dollar, closing at 94.32, buoyed by favorable RBI measures and recent trends in foreign institutional investment, which saw net inflows of approximately Rs 3,400 crore. This shift indicates an improvement in investor sentiment, potentially providing some momentum for domestic equities. With the current technical setup suggesting underlying positive momentum despite recent Consolidation, market participants should remain vigilant as these geopolitical and sector-specific factors evolve over the coming weeks, influencing both risk appetite and asset valuations.
Source: The Economic Times
(Expert Note: This report was prepared by the Wealthova team.)