The NSE's Nifty index rose by 20.15 points or 0.1% to close at 24,252 on Friday, while the BSE's Sensex ended flat at 77,540.83. Despite these gains, both indices recorded weekly declines, with Nifty down 0.5% and Sensex down 0.6% as geopolitical tensions between the US and Iran weighed on market sentiment.
Sunny Agrawal, head of research at SBI Securities, noted that the ongoing US-Iran geopolitical tensions have resulted in subdued trading and range-bound movements in the market this week. The US Federal Reserve's intervention to cool 30-year US bond yields provided some interim relief, and the results season concluded with most companies reporting better-than-expected double-digit revenue and PAT growth.
Brent crude oil futures escalated to over $94 a barrel on Friday evening, maintaining prices above the $90 mark throughout the week. This rise in oil prices continues to be a major concern for the markets, with experts closely monitoring any positive geopolitical developments or a potential cooling off in oil prices over the weekend.
“The US-Iran geopolitical tensions continued to weigh on markets this week, resulting in subdued trading and range-bound moves.”
Sunny Agrawal, head of research at SBI Securities
Ruchit Jain, head of equity technical research at Motilal Oswal Financial Services, emphasized that crude oil prices remain the market's biggest worry. He suggested that if oil prices start to cool off, the Nifty could break past its near-term resistance of 24,500-24,600.
Nifty's Volatility Index increased by 4.1% to 11.2 on Friday, indicating caution among market participants. The Nifty Midcap 150 gained 0.1%, and the Nifty Small-cap 250 rose 0.4%. Of the 4,564 stocks traded, 2,177 advanced, and 2,152 declined. The midcap index remained flat for the week, while the Smallcap 250 rose 0.7%.
“If it starts to cool off, the Nifty may soon break past its near-term resistance of 24,500-24,600.”
Ruchit Jain, head - equity technical research, Motilal Oswal Financial Services
Elsewhere in Asia, Japan's market fell by 0.3%, China remained flat, while Hong Kong rose by 1.2%, South Korea gained 0.9%, and Taiwan increased by 0.7%. The pan-Europe index Stoxx 600 was up 0.2% at the time of reporting. Foreign portfolio investors net sold shares worth ₹543 crore, while domestic institutions were buyers to the tune of ₹2,124 crore.
Background
The Indian stock market has been under pressure due to geopolitical tensions and rising oil prices, which have historically impacted market stability and investor sentiment. The recent correction in Nifty and its subsequent recovery highlight the market's resilience amid external pressures.
Looking ahead, market participants will be closely monitoring geopolitical developments and oil price trends. If tensions ease and oil prices stabilize, it could provide a boost to the markets, potentially allowing Nifty to break out of its current range.
