Crude Oil Prices Surge Amid Strait of Hormuz Fears, Limiting Bullish Rally for Sensex
Indian stock markets were set for a muted start on Friday, with domestic indices bracing amid geopolitical uncertainties and rising crude oil prices. The GIFT Nifty registered a decline this morning as global caution and overnight losses in Western markets weighed against potential rally momentum.Global Risks Elevate Crude Oil Prices
Uncertainty surrounding the Strait of Hormuz has re-intensified geopolitical risks, leading to a sharp rise in commodity prices. Brent crude futures climbed 1.2 percent to $83.48 a barrel, while US West Texas Intermediate crude surged 1.1 percent to $78.84.The escalation follows renewed concerns after Iran and Oman proposed restrictions on vessels deemed hostile, imposing severe penalties for ships violating the proposed rules in the strategic shipping route.
International Markets Show Cautious Mood
Global markets closed lower on Thursday as investors took profits following a strong start earlier in the week. The Dow Jones Industrial Average dipped 0.85 percent, while the S&P 500 declined 0.18 percent and the Nasdaq Composite slipped 0.06 percent.Asian equities also traded with caution ahead of crucial US employment data expected to influence future Federal Reserve decisions. Japan's Nikkei 225 fell 0.9 percent, and South Korea’s Kospi slipped 0.5 percent, though China’s CSI 300 registered a marginal gain of 0.2 percent.
Domestic Markets Post Volatile Session
Indian equities ended Thursday on a volatile yet positive note. The Sensex gained 373.76 points, rising 0.48 percent to 78,954.76. Meanwhile, the Nifty edged up 11.35 points, closing at 24,636, marking a gain of 0.05 percent.Despite overall gains, the session was capped by weakness in media, realty, and metal stocks, even as PSU bank buying provided essential support to the market indices.
Institutional Flows Provide Domestic Counterweight
Domestic institutional investors (DIIs) stepped up sharply, purchasing equities worth Rs 4,013 crore. This massive domestic inflow acted as a strong counterweight against selling pressure from foreign institutions. Foreign Institutional Investors (FIIs), however, remained net sellers for the second consecutive session, offloading Indian equities worth Rs 17 crore.Analyst View: Constructive Technical Structure Remains
Despite external pressures, analysts maintain that the broader technical structure of the Nifty remains constructive. Ponmudi R, CEO of Enrich Money, noted that continued caution in Asian markets and geopolitical headlines are valid concerns given the absence of a formal diplomatic agreement.He advised investors to note that the 24,700 level serves as immediate resistance for the Nifty. Key support levels include 24,600 and 24,500, with a sustained breakout towards 24,800-25,000 potentially strengthening momentum.
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