The Indian stock market remained rangebound for the fourth consecutive session on Thursday, 13 August, as uncertainty over a potential US-Iran deal and the reopening of the Strait of Hormuz continued to keep investors cautious even as crude oil prices declined amid the prospects of weak global demand this year.
The Sensex ended 114 points, or 0.15%, higher at 78,079.96, while the Nifty ended at 24,395.85, down 40 points, or 0.16%. The Nifty Midcap 100 index rose by 0.15%, while the Smallcap 100 index inched up by 0.27%.
Oil price benchmark Brent crude declined 2% to trade near $87 per barrel amid speculations that oil demand may remain weak this year due to slowing global economic growth.
The Indian rupee, meanwhile, slipped 11 paise to close at 95.44 per dollar compared to its previous close of 95.33.
What moved the market today?
The domestic market struggled to find a direction- a trend seen over the last few sessions- due to persistent uncertainty over a US-Iran deal.
As per reports, Iran and the US, both have claimed that they control the Strait of Hormuz, the narrow waterway through which around one-fifth of the world’s crude oil shipments pass.
Iran closed the Strait in the early days of the war, which began on 28 February this year. The US also imposed a naval blockade of the Strait of Hormuz, forcing Tehran to halt its share of oil shipments.
Softer retail inflation numbers for July in the US and India allayed concerns over an imminent rate hikes by the US Fed and the RBI, but oil price volatility keep the inflation risk prominent.
The US Consumer Price Index (CPI) inched up 0.1% month-on-month in July after dropping 0.4% in June. Year-on-year, the CPI increased 3.4% after rising 3.5% in June.
India’s Consumer Price Index (CPI)-based inflation, or retail inflation, accelerated to 4.45% in July, slightly above the median estimate of 4.4% forecast by 18 economists in a Mint poll.
“Softer-than-feared inflation readings in both the U.S. and India provided support to investor sentiment, reinforcing expectations that the Fed and the RBI can maintain a patient policy stance in the near term. Yet, elevated crude oil prices remain a key overhang, with geopolitical uncertainty in the Middle East preventing a stronger risk-on move,” Vinod Nair, Head of Research, Geojit Investments, noted.
“In the near term, market direction is likely to be shaped by developments in energy markets, geopolitical risks and the sustainability of foreign capital inflows,” said Nair.
Top Nifty 50 gainers and losers today
Tata Consumer, Tata Motors Passenger Vehicles, and NTPC ended as the top gainers in the Nifty 50 index.
On the flip side, Hindalco, ICICI Bank, and UltraTech Cement ended as the top laggards in the index.
Sectoral indices today
Nifty Metal declined 1.05%, ending as the top loser among sectoral indices. Bank Nifty dropped 0.43%, while the Financial Services index declined 0.37%.
On the other hand, Nifty Realty and FMCG rose by almost 1% each. Consumer Durables and IT climbed up to half a per cent.
Nifty’s technical outlook
Sudeep Shah, the head of technical and derivatives research at SBI Securities, said the immediate resistance for Nifty is placed in the 24,520-24,550 zone.
“Any sustainable move above this zone could result in Nifty extending its pullback towards 24,700, followed by 24,850 in the short term. On the downside, the immediate support for Nifty is placed in the 24,270-24,250 zone,” said Shah.
As per Vipin Kumar, AVP-Research at Globe Capital Market, the current chart structure remains sideways, indicating further consolidation within the 24,200–24,700 spot zone.
“We suggest traders maintain a stock- and sector-specific trading approach as long as the index does not give a decisive close on either side of this range,” said Kumar.
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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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