Indian markets are bracing for a volatile start to the week, influenced by escalating global tensions and a significant surge in crude oil prices. Z Business Managing Editor Anil Singhvi projects a challenging opening, despite a strong breakout closing for Indian indices on Friday.
Singhvi highlighted that global cues are not favorable, with signs of intensifying conflict and crude oil prices hovering around $90 per barrel—a level not seen in 40 days. This, coupled with weakness in the United States and mixed signals from Asian markets, particularly Korea, is expected to weigh on market sentiment. The rise in crude oil is a major concern, potentially leading to currency weakness and limiting upward momentum in the markets.
However, Singhvi noted that internal market fundamentals remain robust. Friday’s trading saw a strong breakout for Nifty, with Bank Nifty also closing near breakout levels. Despite minor selling by Foreign Institutional Investors (FIIs) in the cash segment, net buying figures from both FIIs and domestic funds indicate underlying strength. Local triggers, especially the results from seven major banks and Reliance over the weekend, are poised to drive significant sector and stock-specific action.
Given these mixed signals, Singhvi anticipates trading opportunities on both sides. He advises that while a weak start is likely, markets could find support at lower levels, leading to a recovery. Conversely, strong crude oil prices and potential currency depreciation might cap substantial gains.
For traders, key levels to watch include:
- Nifty: Support is identified in the 24175-24265 range, where buying interest is expected. Resistance and profit booking may emerge between 24425-24525.
- Bank Nifty: Support levels are set at 58050-58300. Upper-level resistance, indicating a small hurdle for profit booking, is seen around 58700-58900.
Singhvi emphasized that today’s market is likely to be dominated by stock-specific movements rather than broad market trends, especially considering that midcap and smallcap shares closed slightly in the red on Friday despite the overall breakout. His strategic advice is to allow the market to establish a clear direction after a weak opening, then consider taking contra trades.
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