Indian markets end higher on global cues, Nifty holds range as oil, geopolitics dictate next move

NEW DELHI: Benchmark indices closed in the green on Friday, buoyed by positive cues from the US and Asian markets amid cautious optimism over easing tensions between the US and Iran. Gains were further supported by easing crude oil prices and a slight recovery in the rupee against the dollar.

The Nifty 50 index settled at 23,719.30 points up 0.3 per cent, while the Sensex ended over 0.3 per cent higher at 75,415.35 points. The Dow Jones Industrial Average rose 276.31 points, or 0.55 per cent, to a record close on Thursday, setting up a firm start for Asia-Pacific markets. Asian shares advanced Friday following modest gains on Wall Street, even as Japan’s softer-than-expected April inflation data kept investors watchful.

On the domestic front, buying at lower levels and selective strength in financials helped offset lingering uncertainty. “Domestic markets traded with a mild positive bias, supported by buying at lower levels and moderately constructive global cues expecting easing tensions in the Middle East,” said Vinod Nair, Head of Research, Geojit Investments Limited. He noted that “globally, the AI investment theme remained the primary driver, while domestically financial stocks led the gains, with selective interest in autos and consumption.”

The market tone, however, remains range-bound. “Overall, markets remain range-bound, with strong DII inflows cushioning the downside and persistent FII selling limiting the upside,” Nair added. “Market is in a buy-on-dips and sell-on-rallies pattern. A sustained uptrend will likely require geopolitical stability and softer oil prices, which would strengthen macro conditions and improve FII sentiment, especially as corporates head into a weak Q1FY27.”

Crude oil stayed in focus after a volatile week. Oil prices had eased Thursday in US trading, alleviating pressure from the bond market as yields fell. Earlier this week, yields climbed high enough to threaten growth and weigh on stocks, bitcoin, and other risk assets. On Friday, Brent crude futures for July and US West Texas Intermediate futures for June advanced around 2 per cent in early Asia trading, resuming their rally after three straight sessions of declines as investors weighed mixed messaging on Iran peace deal negotiations.

The geopolitical backdrop continues to anchor near-term sentiment. The Nifty 50 index is expected to move in the range of 23500 to 23800 if the tensions related to the Strait of Hormuz in West Asia remain the same, but any improvement through talks between Iran and the US will only push the market towards higher levels.

Meanwhile, concerns over extreme oil scenarios were downplayed. On the recent Wood Mackenzie report, which expects Brent crude to touch $200 per barrel, Mahesh said that the report is based on extreme cases and crude oil prices are not expected to reach those levels.

Technically, the Nifty remains stuck in a consolidation band, with 23500 acting as immediate support and 23800 as the first hurdle. A breakout would need two catalysts: durable de-escalation in West Asia and Brent stabilizing below $85. Until then, strong DII flows should limit sharp downsides, but FII outflows and oil volatility will cap quick rallies. Traders should keep an eye on US-Iran diplomacy headlines and next week’s domestic macro data. (ANI)