Nifty Signals Muted Start for Indian Markets After Sharp Rally, Global Equities Remain Firm Amid Elevated Oil Prices

Indian Equity Benchmarks Set for Cautious Start Despite Global Strength

The Indian equity market is expected to open on a cautious note on Friday, following Thursday's sharp rebound, as investors remain wary of elevated crude oil prices, persistent geopolitical uncertainty, and mixed global cues. The GIFT Nifty was trading at 23,678 in early morning trade, down 51 points or 0.22 percent from the previous close, indicating a mildly negative start for benchmark indices.

The Sensex and Nifty rallied sharply on Thursday, led by strong buying in banking, pharma, metal, and infrastructure stocks. The Sensex surged 789.74 points or 1.06 percent to close at 75,398.72, while the Nifty rose 277 points or 1.18 percent to settle at 23,689.60. However, IT stocks remained under pressure throughout the session, with Infosys, Tech Mahindra, HCL Tech, and TCS among the top laggards.

Global Markets End Higher

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Global cues remained broadly supportive overnight, with U.S. markets ending higher on Thursday. The S&P 500 and Nasdaq hit fresh record closing highs, aided by continued strength in technology stocks and optimism around strong corporate earnings. The Dow Jones Industrial Average rose 370.26 points or 0.75 percent to 50,063.46, the S&P 500 gained 0.77 percent to 7,501.24, while the Nasdaq Composite climbed 0.88 percent to 26,635.22.

Asian Markets Trade Higher

Asian markets also traded higher on Friday morning, tracking Wall Street gains and continued momentum in AI-linked stocks. Stocks in Japan, South Korea, and Australia advanced, pushing the broader MSCI Asia Pacific Index higher and putting it on track for a sixth consecutive weekly gain.

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Crude Oil Prices Remain a Concern

Elevated crude oil prices continued to remain a key concern for Indian markets, with Brent crude futures rising 0.57 percent to $106.32 per barrel. U.S. WTI crude traded above $101.7 per barrel, amid lingering concerns over ship attacks and disruptions around the Strait of Hormuz, despite Iran indicating that some vessel movement had resumed.

Fuel Price Hike

Investor sentiment may also remain cautious after state-run oil marketing companies raised petrol and diesel prices by Rs 3 per litre each on Friday, passing on part of the sharp rise in global energy costs to consumers. The move follows Prime Minister Narendra Modi's recent call for fuel conservation amid concerns over the Iran conflict and elevated oil prices.

Institutional Flow Trends

Institutional flow trends offered some support to the market. Foreign institutional investors (FIIs) turned net buyers on Thursday after several sessions of selling, purchasing shares worth Rs 187 crore. Domestic institutional investors (DIIs) also remained net buyers, investing Rs 684 crore in equities.

Market Outlook

Ponmudi R, CEO of Enrich Money, said Indian markets are expected to trade with a cautious yet relatively stable undertone as easing crude prices provide partial relief, although geopolitical uncertainty and global risk sentiment remain key variables. He added that the rupee continues to remain under pressure above the 95.7 mark against the U.S. dollar, while sustained institutional inflows would be essential to improve broader market confidence.

Technical Analysis

On the technical front, Ponmudi said Nifty continues to trade with a cautious recovery bias, with the 23,500-23,400 zone acting as immediate support and the 23,900-24,000 range emerging as the next resistance area. A decisive breakout above the 24,000 mark would be required to strengthen bullish momentum further, he said.