Sensex Plummets, Nifty Slips Amid Escalating Geopolitical Tensions in Middle East
The Indian equity markets saw a subdued session on Friday, with both key benchmarks sliding further due to persistent geopolitical concerns. Investors remained in a clear risk-off mood as escalating tensions in the Middle East weighed heavily on market sentiment.At one morning reading, the Sensex stood at 77,790.74, declining by 289.22 points or 0.37 percent. The Nifty also dipped, closing at 24,316.85, down 79 points or 0.32 percent. This decline extends the downward trend observed in both indices throughout the week.
Geopolitical Concerns Fuel Market Decline
The primary driver behind the market downturn remains escalating tensions stemming from the Middle East region. These concerns have continued to outweigh positive prospects that the Federal Reserve may maintain steady interest rates soon.The United States reportedly stated on Thursday that it could indefinitely enforce a naval blockade against Iran. Furthermore, Washington threatened to ratchet up economic pressure on Tehran as diplomatic ceasefire talks continue to falter.
FII Selling and Oil Prices React
Foreign institutional investors (FIIs) continued their selling spree for the second consecutive session on Thursday. These investors offloaded equities amounting to Rs 510 crore, contributing to market weakness.Crude oil prices showed a slight upward movement after the US threat was announced. Brent crude futures rose by 0.1 percent to $87.16 a barrel. Meanwhile, US West Texas Intermediate crude remained relatively stable at $81.29.
Technical Outlook Points to Bargain Hunting Opportunity
Despite the prevailing risk aversion, market structure suggests potential upside following recent formations. Anand James, Chief Market Strategist at Geojit Investments, noted that hammer formations observed over the last two days indicate bargain hunting activity. This is particularly true after the 20-day moving average attempted to arrest downside momentum.Oscillator indicators continue to point toward an upside move, targeting initial levels of 24540-666. A broader target range suggested by analysts extends up to 24850-25100. However, the expert also stressed the need to monitor key support areas near 24329-240 given the swings seen in the last two days.
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