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Indian benchmark indices open in the green on Thursday despite international Brent crude prices breaching the USD 100 per barrel mark amid rising geopolitical tensions. The BSE Sensex stood at 74,832.29 points, higher by 68.06 points or 0.09 per cent. Similarly, the broader NSE Nifty 50 traded at 23,446.60 points, up 15.10 points or 0.06 per cent.

Expert Analysis: Market Vulnerability and Macro Pressures

Despite the uptick on Thursday morning, V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, pointed out the domestic and global pressure points. “With Nifty dipping below the 23500 resistance, the market construct has turned weak. Technically the market is vulnerable to further correction, and the fundamental macro trends continue to deteriorate. Brent crude has spiked above USD 101 and the U.S. 10-year yield has moved up to 4.83%,” Vijayakumar said.

At the time of reporting, Brent Crude stood at USD 101.02 per barrel (-0.18%), whereas Crude Oil edged up slightly by USD 0.05 (+0.05%) to USD 96.10. At the same time, Gold posted modest gains, advancing by USD 9.65 (+0.22%) to reach USD 4,407.80.

Vijayakumar mentioned that the probability of a Fed rate hike this month has increased and this is also contributing to the concerns in the market. “The geopolitical tensions in the Middle East are deteriorating and the market is giving no heed to Trump’s tall talk that 'the war will end immediately after the election (US mid-term)',” Vijayakumar added.

“Even though India’s forex reserves are comfortable and the current account deficit is under control, if crude remains above USD 100 for an extended period of time, it will impact India’s GDP growth this year with its fallout on corporate earnings too.”

Sector-Specific Impact

He mentioned that the sectors that are likely to be impacted are energy sensitive sectors like aviation, paints, adhesives, tyres and chemicals. In such an environment defensives like FMCG and sectors with inelastic demand like pharmaceuticals and healthcare will remain resilient. Growth sectors like digital platform companies will continue to be on strong footing.

“Even though banking stocks, particularly the large private sector players, are technically weak, they are fundamentally strong. The risk-reward ratio in this segment favours reward, for long-term investors,” Vijayakumar said.

Global Cues and Technical Outlook

Analysing the market structure, Rajesh Palviya, Head of Research at Axis Direct, noted the pressure from global benchmarks. “Asian markets are also trading lower this morning, extending the cautious global tone as elevated crude prices weigh on risk appetite. Gold remains firm near USD 4,400 an ounce on safe-haven demand, while Brent above USD 101 a barrel remains a significant inflationary headwind for India. With Asian cues weak and GIFT Nifty indicating a subdued start, the Nifty is likely to open on a soft-to-negative note,” Palviya said.

At the time of reporting, Asian indices trade lower, with Japan's Nikkei 225 down 0.71 per cent, Hong Kong's Hang Seng declining 1.51 per cent, and the Straits Times falling 0.67 per cent, while GIFT Nifty traded marginally higher at 23,513.50 points. In the US market, Dow Jones Futures traded up by 0.35 per cent, even as the S & P 500 is down 0.48 per cent at 7,636.36 points and the Nasdaq off 0.64 per cent at 26,253.34 points.

“Technically, the undertone remains fragile as long as the Nifty trades below the 23,600 resistance zone. The immediate support is placed near 23,350, and a decisive break below this level could extend the decline towards 23,150. However, any moderation in crude prices or easing of geopolitical tensions could trigger a relief rebound. For now, traders should remain cautious, with volatility likely to stay elevated,” he added. (ANI)