Global Tensions Escalate: Implications for Indian Equities Market.

Indian Equity Markets End Two-Week Winning Streak

Indian equity markets ended their two-week winning streak on a subdued note, with the Nifty 50 shedding nearly 2 percent over the week ended April 24 and slipping below the psychologically significant 24,000 mark. The index lost 455.6 points, or 1.87 percent, over the five sessions, weighed down by a confluence of global and domestic pressures.

The selloff was primarily driven by mounting uncertainty surrounding US–Iran negotiations, which pushed crude oil prices higher and stoked fears of supply disruptions. This was compounded by persistent foreign institutional investor (FII) outflows and a weakening rupee. Adding to the pressure were mixed quarterly earnings from the technology sector, which triggered a sharp correction in IT stocks. The IT index tumbled 10 percent, its steepest weekly fall since March 2020.

Sectoral Performance

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Broader indices fared somewhat better. The Midcap 100 declined 0.8 percent, while the Smallcap index managed to close the week largely flat. Sectoral performance was sharply polarised. Consumer Durables, Auto, Private Banks, Realty, and Metals each fell in the 1–2 percent range, while Energy, FMCG, Media, and Healthcare bucked the trend, posting modest gains of 0.5 percent-2.6 percent.

Institutional Flows

On the institutional flows front, FIIs remained net sellers throughout the week, offloading equities worth Rs 17,139.86 crore. This brought the month's total net sales to a substantial Rs 56,364 crore, reflecting continued caution among overseas investors. The Indian rupee mirrored this risk-off sentiment, depreciating sharply by 133 paise over the week to close at 94.25 against the US dollar on April 24, compared to 92.92 the previous week.

US Markets

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In contrast, US markets had a more constructive week, with several indices touching record highs. Broadly positive economic data, resilient earnings, and sustained momentum in artificial intelligence-linked stocks helped Wall Street look past the ongoing geopolitical uncertainty.

Market Outlook

Looking ahead, stock-specific movement is likely to be driven by the ongoing earnings season, while the trajectory of the broader market will hinge closely on developments around the Strait of Hormuz — a critical artery for global oil flows whose stability remains very much in question.

Weekly Chart

On the weekly chart, the Nifty closed at 23,897.95, down 1.87%. The index continues to respect a long-standing support trendline that has held on multiple occasions — price touched it again in recent weeks and rebounded, signalling underlying buying interest.

However, resistance is emerging from a descending trendline that converges with the 40-week exponential moving average. This confluence is acting as a ceiling, and the current pullback may well be a retracement following the recent sharp recovery. The RMI offers some comfort, as it registers a bullish crossover in momentum.

Breadth Indicators

The FII net index position indicator currently stands at -2,04,079. While FIIs were in an extremely bearish stance just a couple of weeks ago, the indicator has since recovered from those oversold levels. Notably, it has begun forming a higher high structure, suggesting that FIIs are actively trimming their short positions. Selling pressure appears to be easing, and the overall trend in FII positioning is gradually shifting less bearish.

The Put/Call ratio open interest, smoothed by a 9-day moving average, currently stands at 0.88, having recently peaked near the extreme overbought zone of 0.92. Historically, a drop below the 0.9 level has often preceded short-term or more significant corrections in the Nifty. The current setup follows that familiar pattern — the indicator climbed above 0.9 and has since turned lower, coinciding with the correction now unfolding in the market.

Sector Rotation

Nifty 50 – The Benchmark Index ended lower, by -1.87 percent this week and closed at 23,897.95.

Stocks to Watch

Among the stocks expected to perform better during the week are PowerIndia, SAIL, Hindalco, Nestle India, Cummins India, Adaniensol, NMDC, BHEL, AU Bank, and Adani Green.