Sensex rebounds 650 points as markets shrug off US-Iran tensions
What's the story
The Indian stock market has witnessed a significant recovery today, with the Sensex and Nifty trading in the green. At around 11:30am, the Sensex was up by 382 points at 78,875 while Nifty gained some 99 points to 24,452. At opening bell, Sensex had fallen over 200 points while Nifty was below 24,300. The market is likely to remain volatile in the near term due to geopolitical tensions and oil price fluctuations.
Market uncertainty
Geopolitical tensions in West Asia may impact market sentiment
The ongoing West Asian conflict continues to keep the market on its toes. Iran's hardening stance, including closing the Strait of Hormuz and threatening retaliation against a US seizure of an Iranian ship 'violating the US blockade,' could escalate tensions when the ceasefire ends on April 22. However, despite Brent crude prices rising back to $95 levels from below $90 on Friday, there is no panic in the crude market.
Investor sentiment
Wait-and-watch approach prevails in the market
The market is currently in a wait-and-watch mode, with traders hesitant to take aggressive positions amid uncertainty over oil price movements. Pankaj Pandey, head of retail research at ICICI Securities, said despite the escalation in the Middle East, the market still believes that the war may not continue for long. This sentiment is also reflected in foreign flows into Indian markets.
Institutional activity
FIIs turn net buyers
On the institutional front, provisional data shows that foreign institutional investors (FIIs) were net buyers on April 17 with inflows of around ₹683 crore. Domestic institutional investors (DIIs), on the other hand, were net sellers with outflows of about ₹4,721 crore. FIIs have continued their buying spree for a third consecutive session on Friday.
Technical analysis
Nifty technical outlook
From a technical perspective, the Nifty 50 continues to hold above the crucial 24,300 zone. Immediate support is placed near 24,200-24,250 while resistance is seen around 24,550-24,600. A sustained move above this resistance band could extend the ongoing rally while failure to hold higher levels may result in range-bound movement. This view is also supported by the index holding above key moving averages with a positive bias.