Softer crude, easing middle east tensions to lift Indian market outlook: Experts
Mumbai, August 3
Indian equity markets are likely to open on a cautious-to-positive note on Monday, supported by easing geopolitical tensions in the Middle East and a sharp decline in crude oil prices, while GIFT Nifty indicated a mildly positive start around the 24,565 level, as per analysts.
Brent crude futures tumbled over 6 per cent to USD 82.41 after US President Donald Trump said talks with Iran will happen on Monday. Trump said late Saturday on his Truth Social platform that Iran and other Middle Eastern countries had sought time to finalize a deal that would result in the "Immediate, Complete and Total" reopening of the Strait and address "Iran's nuclear threat," while insisting that Tehran must "rapidly make a DEAL."
At the time of reporting, Brent crude was trading at around USD 83.90 per barrel while crude oil was trading at around USD 80.15 per barrel. At the same time, Japan's Yen surged over 1 per cent to 155.39 per US dollar after the U.S. and Japan confirmed joint intervention to prop up the frail currency.
Rajesh Palviya, Head of Research, Axis Direct noted, "Asian markets have opened on a softer note after Friday's semiconductor-driven rally, suggesting a cautious start for regional equities."
"The decline in oil prices is a constructive development for India, as it helps ease inflationary pressures, supports the rupee, and improves the macro outlook. Meanwhile, GIFT Nifty was indicating a mildly positive opening around the 24,565 mark," he said.
As per Palviya, technically, the market continues to maintain a positive bias as long as the Nifty sustains above the 24,250 support zone. "A decisive break below this level could trigger a pullback towards 24,100. On the upside, immediate resistance is placed near 24,550, followed by the 200-day moving average around 24,780. While subdued Asian cues may limit near-term gains, continued softness in crude oil prices remains a key supportive factor that could help the index gradually move towards the higher end of its trading range," he noted.
At the same time, Abhishek Kumar, SEBI RIA, noted, "GIFT Nifty is trading around 24,600 (+0.5%), signaling a strong gap-up opening for the Nifty 50, building on Friday's robust close and broader global momentum. A bullish start is expected. Softer oil prices and strong global cues provide a robust foundation for today's opening session."
Devarsh Vakil, HSL Prime Research, said "Indian indices are breaking out from near-term resistance levels after several months of consolidation. Nifty index has closed above its 200 DEMA and swing-high resistance, reinforcing the near-term positive bias. Next resistance is seen at 24,530 (07 July swing high), followed by 24,778 (200-day SMA)."
— ANI
Reader Comments
Softer crude is definitely a relief for the common man. With petrol and diesel prices having touched the sky earlier, any drop in global prices gives hope. However, I remain skeptical about the Middle East situation - one tweet from a world leader and everything can change overnight. Let's be cautious before celebrating.
The technical analysis looks solid - Nifty holding above 24,250 is a good sign. But as a small investor, I've learned not to get too carried away with short-term movements. The 200-day moving average around 24,780 will be the real test. Let's see if we can sustain the rally beyond that level.
A drop in crude oil prices is like music to Indian ears! From household budgets to corporate margins, everything gets a boost. I just hope the government uses this opportunity to rationalize taxes on fuel too, instead of just letting the oil companies pocket the difference. That would truly benefit the aam aadmi.
Good to see that geopolitical tensions easing is being reflected in the markets. The GIFT Nifty showing a positive start is reassuring. However, the semiconductor-driven rally in Asian markets might not have the same momentum here. Let's focus on domestic fundamentals - manufacturing, IT spending, and monsoon progress.
As someone who's been tracking Indian markets from abroad, this looks promising. Lower crude prices will definitely boost investor sentiment and strengthen the rupee. But the yen intervention by Japan shows how fragile the global currency markets are right now. These are uncertain times - maybe a good time to stay diversified.
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