Mumbai, August 21: The Indian stock market opened higher for the second consecutive day on Friday, despite soaring crude oil prices and rising U.S. bond yields. The major indices, Sensex and Nifty, showed gains in early trading, driven by buying in the real estate, metal, and pharmaceutical sectors. However, the market later lost some of its gains and slipped into the red.
At the start of trading, the BSE Sensex opened at 77,701.07, up by 163.35 points or 0.21%. During the session, it reached a high of 77,725.67, marking a gain of 187.95 points or 0.24%, while the day’s low was 77,445.86.
Similarly, the Nifty 50 began trading at 24,284.05, up by 52.20 points or 0.22%. It also touched a high of 24,284.05 during the session, with a low of 24,206.80.
In the broader market, the Nifty Midcap index recorded a decline of 0.20%, while the Nifty Smallcap index saw an increase of 0.73%.
Sector-wise, Nifty Realty emerged as the top performer, gaining 0.7%. This was followed by Nifty Metal and Nifty Pharma, which rose by 0.48% and 0.32%, respectively. Nifty Midsmall Healthcare and Nifty REITs & Realty also remained in the green, strengthening by 0.32% and 0.28%.
On the downside, Nifty IT was the weakest sector, showing a decline of 0.6%. Additionally, the Midsmall IT and Telecom sectors saw a drop of 0.17%, while Nifty Auto fell by 0.19%.
Market experts suggest that maintaining the momentum from the previous trading session will be challenging due to persistently high crude oil prices and rising U.S. bond yields. They believe that Brent crude oil nearing $94 per barrel could exert pressure on large stocks, prompting investors to book profits.
However, there are expectations of continued strength in the broader market. Ongoing buying by institutional investors and positive signals from the domestic economy are providing support to the market.
Analysts note that there remains investor interest in shares of non-banking financial companies, digital platform firms, the pharmaceutical sector, and companies involved in contract-based research and manufacturing. Despite high valuations, buying in these sectors continues.
From a technical perspective, experts indicate that Nifty has formed a bullish Doji pattern after seven consecutive sessions of decline, signaling a reduction in selling pressure. If Nifty remains above the support zone of 24,060 to 24,000, it could see gains towards 24,317, 24,380, and subsequently 24,400 to 24,545.
Global markets showed mixed signals. Asian markets experienced weakness as rising yields on long-term U.S. Treasury bonds exerted pressure on Wall Street.
Meanwhile, the international oil market continued its upward trend, with Brent crude trading around $93.96 per barrel.
Oil prices surged following a statement from U.S. Treasury Secretary Scott Basant, indicating that the U.S. may implement some of the toughest sanctions on Iran to date. This raised concerns about potential disruptions to global oil supply.
Experts believe that as long as crude oil prices remain elevated, the Indian stock market may experience limited fluctuations. However, strong participation from domestic investors and improving economic indicators will continue to support the market.
Leave a Comment