Equity Markets Vulnerable Amid Ongoing Conflict and Oil Price Volatility

Market Update: Global Equity Markets Decline Amid Crude Oil Price Volatility

Key Takeaways

• Crude oil prices have held above $100 per barrel for the third consecutive week, casting a negative shadow over global equity markets.
• The Nifty50 fell 5.31% over the week, with the Midcap and Smallcap indices shedding 4.5% and 3.6% respectively.
• Foreign Institutional Investors (FIIs) remained net sellers, offloading equities worth Rs 35,052 crore during the week alone, bringing the month's total outflow to Rs 56,883 crore.

Sector Performance

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• The auto sector led the decline, falling 10.6%, while PSU Banks, Defence, and Private Banks each dropped 7%, and Metals shed 6%.
• Every sectoral index closed in the red, highlighting the broad-based anxiety in the market.

Technical Analysis

• The Nifty50 closed at 23,151.10, breaking through a major support level and carving out a lower-low structure, a classically bearish formation.
• The index has slipped below its 40-period exponential moving average, a threshold many traders watch as a barometer of the medium-term trend's health.
• The RMI momentum indicator continues to hold below the zero line, a sign that selling pressure remains firmly in control.

Breadth Indicators

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• The breadth indicator, measured by the percentage of Nifty50 stocks trading above their 200-day simple moving average, currently sits at 28, having broken below a major prior support zone.
• The number of Nifty50 stocks making new one-month highs has fallen to 2, its lowest recorded level, confirming that upside participation across the index is virtually non-existent.

FIIs Position

• FIIs have a net index futures position of -2,60,540, a deeply negative figure that has broken below its previous major support zone, signalling that FIIs have not merely maintained their short positions but have actively extended them.