Nifty 50 Outlook: Market Setup Amid US-Iran Tensions, Crude Oil Prices and FII Outflows

Indian Stock Market Update

Key Indices

The Indian stock market is expected to open in the red on Thursday, with the Sensex and Nifty 50 indices anticipated to continue their downward trend. This decline is attributed to weakness in global markets, fueled by rising crude oil prices due to the intensifying US-Iran conflict, which has raised inflation worries and unsettled investors.

Global Market Trends

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Asian markets have seen declines, while the US stock market closed with mixed results overnight after the release of modest inflation data. The US-Iran conflict has led to increased tensions, with President Donald Trump asserting the need to see the mission through, while Iran cautions that the global community should prepare for oil prices reaching $200 a barrel.

Crude Oil Prices

Crude oil prices have soared following the suspension of operations at Iraq's oil ports due to attacks on two tankers. The price of Brent crude oil increased by 7.40% to reach $98.79 per barrel, while US West Texas Intermediate (WTI) crude futures experienced a rise of 6.87%, climbing to $93.34.

Foreign Institutional Investors (FIIs)

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

FIIs sold equities worth ₹6,267.31 crore on a net basis on Wednesday, according to exchange data.

Trade Setup for Thursday

The bearish sentiment remains dominant, with sellers appearing around the 24,300 level, resulting in a sharp decline throughout the day. The index has continued to slide and briefly broke below the 24,000 threshold.

Technical Analysis

The persistent increase in crude oil prices and the constrained supply of natural gas have sent ripples through the Indian equity market. The technical backdrop has shown further signs of deterioration, with the positive gap between the 50-day moving average (50DMA) and the 200-day moving average (200DMA) decreasing, raising the risk of a death cross.

Support and Resistance Levels

Support levels are identified at 23,700 and 23,300, while resistance is set at 24,100 on the upper side.

Market Outlook

Domestic equities declined as weak global indicators and the ongoing US-Iran conflict heightened risk-averse sentiment. Fears of rising inflation due to possible energy supply interruptions and rationing led investors to take profits, while persistent FII outflows further intensified market pressures.

Stock Recommendations

Market experts have recommended the following eight intraday stocks for today:

• Great Eastern Shipping Company Ltd
• Glenmark Pharmaceuticals Ltd
• Coal India Ltd
• Oil and Natural Gas Corporation Ltd (ONGC)
• Hindalco Industries Ltd
• Oil India Ltd
• Supreme Industries Ltd
• Man Industries (India) Ltd

Specific Stock Picks

• Great Eastern Shipping Company: Buy at ₹1,426 with a stoploss at ₹1,375 and a target of ₹1,530.