Stock markets are likely to open on a cautious but slightly positive note on Friday as investors track crude oil prices, developments in US-Iran peace talks and quarterly earnings for further direction.
GIFT Nifty futures were trading at 23,651 at 8:01 am, indicating that the benchmark Nifty50 could open near Thursday’s closing level of 23,654.70.
The BSE and NSE Nifty have remained largely flat this week as investors continue to assess the impact of the ongoing Iran conflict on oil prices, inflation and global economic growth.
Oil prices remained elevated on Friday morning despite some easing in geopolitical concerns.
As of around 8:50 am Brent crude was trading at $104.20 per barrel, up 1.58%, WTI crude stood at $97.45 per barrel, up 1.14%
Markets are closely watching negotiations between the US and Iran as any escalation or breakthrough could sharply impact crude oil prices.
The two countries continued to hold opposing positions on issues including Iran’s uranium stockpile and control over the Strait of Hormuz, although US Secretary of State Marco Rubio said there had been “some good signs” in discussions.
The Iran conflict has significantly disrupted global energy markets since late February and has become one of the biggest triggers for equity market volatility worldwide.
Higher crude oil prices are a major concern for India because the country imports nearly 90% of its oil requirements.
Expensive oil increases inflation risks, weakens the rupee,raises fuel and transport costs, and impacts corporate profitability.
The Nifty50 and Sensex have already fallen around 6% and 7.5%, respectively, since the Iran war began.
Foreign investors have also pulled out heavily from Indian equities amid global uncertainty.
Foreign portfolio investors (FPIs) have sold shares worth over $22.2 billion in less than three months, already surpassing the record annual outflow seen last year.
On Thursday alone, FPIs sold Indian equities worth Rs 1,891.21 crore, according to provisional exchange data.
Shrikant Chouhan, Head Equity Research at Kotak Securities, said markets are likely to remain range-bound in the near term.
“We believe the short-term structure of the market is non-directional, and range-bound activity is likely to continue in the near future,” he said.
According to Chouhan, 23,500-23,400 on Nifty remains an important support zone, while 23,800-23,850 could act as key resistance levels.
He added that a breakout above 23,850 could push markets towards the 24,000 mark, while a fall below 23,400 may trigger further weakness.
Hitesh Tailor, Research Analyst at Choice Equity Broking, said markets may open positively due to firm global cues and improving sentiment across Asian markets.
“Indian equity markets are expected to open on a positive note, with Gift Nifty trading around 23,669, up by 153 points,” he said.
However, Tailor cautioned that benchmark indices are still struggling to sustain at higher levels.
On Thursday, the Nifty50 opened gap-up at 23,830, touched an intraday high of 23,859, but later lost momentum and closed marginally lower.
Technically, analysts say the formation of a bearish candlestick pattern suggests resistance at higher levels.
The Relative Strength Index (RSI) stood at 45.55, indicating neutral-to-weak momentum, while India VIX declined to 17.82, signalling easing volatility.
The Bank Nifty index ended 0.23% lower on Thursday at 53,439.40 after witnessing profit booking at higher levels.
Analysts said the banking index continues to show weak momentum despite support-based buying at lower levels.
Immediate support is placed near the 53,300-53,500 zone, while resistance is seen around 54,400-54,500.
Domestic institutional investors (DIIs) continue to provide some support to the market. On Thursday, DIIs bought equities worth Rs 2,492 crore.
Analysts believe markets could continue to witness stock-specific action along with intermittent volatility until clearer signs emerge on global geopolitical developments and crude oil trends.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)