Indian benchmark indices are likely to open lower on Friday, with GIFT Nifty indicating early weakness. Rising crude oil prices, weakness in US and Asian markets, and increasing caution among investors remain key factors influencing market direction.
GIFT Nifty was trading around 23,346.50, down about 113.5 points, or 0.48 percent, during early trade. This indicates that the Indian stock market may open lower on Friday. However, the direction of the full trading session cannot be determined from early signals alone, as trends in global markets, fluctuations in crude oil prices and activity among domestic investors may influence the market.
Brent crude remained around the $102 per barrel level. The sustained rise in oil prices is significant for a major importing country such as India, as higher crude prices can affect the import bill, inflation and companies’ costs.
Higher oil prices are also weighing on investor sentiment. Aviation, transportation, paints, chemicals and other sectors whose cost structures are affected by crude oil prices will remain in focus.
Global cues remain unfavorable for the Indian market. Pressure in US markets and weakness across Asian stock markets have increased investor caution. A rise in risk aversion across global markets can also affect emerging markets through foreign investor activity.
The Indian market has already been trading within a limited range. In this backdrop, weak global cues could increase market volatility. Investors are watching US economic data, central bank policies and any new developments in the oil market.
Indian benchmark indices opened almost flat on Thursday and traded within a limited range for most of the session. High crude oil prices and mixed global cues led investors to avoid making large bets. However, buying increased during the Closing Auction Session (CAS) in the final phase of trading, leading to a recovery in the market.
The Sensex and Nifty subsequently closed higher, recovering much of the weakness seen during the session.
For Nifty, the 23,380-23,400 zone is considered an immediate support area. A move below this level could increase selling pressure and lead to further weakness in the market.
On the upside, 23,550-23,600 is an important resistance zone. If Nifty manages to sustain above 23,600, the scope for a recovery could increase, with the index potentially moving towards the 23,800 level.
