Indian equity markets extended their decline for a second consecutive session, closing lower on Friday due to weak global cues and rising geopolitical tensions in the Middle East.
Nifty Ends Lower, Sectoral Weakness Persists
The Nifty 50 index slipped 0.68% to close at 24,718.60, after a gap-down opening triggered by global risk aversion. While selective buying in heavyweight stocks helped curb deeper losses, most sectors closed in the red. FMCG and banking stocks led the decline. The broader market also remained under pressure, with midcap and smallcap indices falling nearly half a percent each.
Crude Oil Spike and Inflation Concerns
A sharp rise in Brent crude oil prices to nearly $76 per barrel, the highest in 2024 so far, sparked concerns of imported inflation. The rise followed Israel’s preemptive strike on Iran, which escalated tensions in West Asia and sent global investors into risk-off mode.
CPI Inflation Offers Temporary Relief
India’s CPI inflation for May moderated below the Reserve Bank of India’s comfort level, offering some macroeconomic relief. However, this positive data was overshadowed by foreign institutional outflows and external geopolitical headwinds.
Technical View: Nifty in Consolidation Mode
Technically, the Nifty slipped below its 20-day EMA but rebounded quickly from the lower end of the consolidation zone (24,500–25,200). This suggests the index may remain in a range-bound phase unless a breakout occurs in either direction.
Expert Outlook
Advised investors to maintain a balanced approach, avoid aggressive trades, and focus on stock-specific opportunities aligned with sectoral and thematic trends. He highlighted that geopolitical instability and foreign fund outflows will likely keep the market cautious in the near term.
Disclaimer:
The information provided in this blog is for educational and informational purposes only. It does not constitute investment advice, a recommendation, or an offer to buy or sell any financial instruments. Stock market investments are subject to market risks. Past performance is not indicative of future results. Readers are advised to consult a qualified financial advisor before making any investment decisions. The author and publisher are not liable for any losses or damages arising from the use of this information.
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