Sensex and Nifty Stay Flat as Crude Oil Concerns Keep Investors Cautious

Market Update at 2:20 PM: IIndian equity markets remained rangebound on Friday as investors balanced domestic buying interest with global concerns around crude oil prices and geopolitical tensions. The Sensex ended at 77,560.02, gaining 22.30 points or 0.03 per cent, while the Nifty 50 closed at 24,239.40, up 4.90 points or 0.02 per cent. The market remained cautious as rising oil prices and global bond market movements limited upside momentum.

The broader market showed mixed participation. The Nifty Smallcap index outperformed with a gain of around 0.7 per cent, while the Nifty Midcap index slipped nearly 0.2 per cent. The divergence indicated selective buying among smaller companies even as investors remained careful in large and mid sized stocks.

Banking stocks remained steady as investors tracked financial sector developments and institutional activity. Financials have continued to attract foreign investor interest during August, with FIIs turning more positive towards banking and financial stocks in the first half of the month.

Among sectoral indices, IT stocks faced pressure with the Nifty IT index declining around 0.5 per cent as investors booked profits after recent gains. Rising global bond yields and uncertainty around global growth continued to influence technology stocks.

On the gaining side, select financial and commodity linked stocks supported market sentiment. Smallcap focused sectors also witnessed buying interest, helping the broader market outperform frontline indices..

Market Update at 12:50 PM: Indian equity markets remained rangebound on Friday as investors balanced improving global cues with concerns around rising crude oil prices and geopolitical uncertainty. At around 12:40 PM, the Sensex was trading near 77,560 levels, up around 20 to 30 points, while the Nifty 50 hovered around 24,240 levels with marginal gains of nearly 0.02 per cent. The market recovery seen in the previous session has helped stabilise sentiment, but buyers are still waiting for stronger triggers before taking aggressive positions.

The broader market remained mixed during the session. The Nifty Midcap index slipped around 0.2 per cent, while the Nifty Smallcap index outperformed with gains of nearly 0.7 per cent. Selective buying in smaller companies indicated that investors continued to look for stock-specific opportunities despite caution in frontline indices.

Banking stocks remained relatively stable, with the Nifty Bank index trading in a narrow range as investors tracked interest rate expectations, credit growth trends and upcoming policy cues.

Sectoral performance remained uneven on Dalal Street. The Nifty IT index declined around 0.5 per cent as investors booked profits after recent gains, while concerns around global technology spending and US market trends kept sentiment cautious.

On the positive side, select financial stocks and smaller companies attracted buying interest. Gold financing companies continued to remain in focus after recent strength in gold prices and favourable sector sentiment.

Stocks in FocusWelspun Corp emerged among the notable gainers, surging nearly 11.8 per cent after the company secured a large order worth USD 1.8 billion, boosting investor confidence around its future revenue visibility.

Urban Company gained around 4.4 per cent after receiving a positive brokerage view, which improved investor sentiment towards the newly listed consumer services player.

Niva Bupa Health Insurance remained under pressure, declining around 2 per cent following regulatory-related concerns.
 

Market Update at 11:00 PM: Indian equity markets remained largely rangebound on Friday morning as investors stayed cautious amid elevated crude oil prices and uncertainty in global bond markets. The Sensex was trading near 77,560, up around 22 points or 0.03 per cent, while the Nifty 50 was almost flat at 24,239, gaining around 5 points or 0.02 per cent.

Broader markets showed a mixed trend. The Nifty Midcap 100 declined around 0.2 per cent, while the Nifty Smallcap 100 gained nearly 0.7 per cent, reflecting selective buying in smaller stocks despite a lack of strong direction in frontline indices. Banking stocks remained under pressure as investors weighed domestic liquidity support against concerns over global bond yields and crude oil prices. Overall, market activity remained largely stock-specific rather than broad-based.

Sectoral performance was mixed, with Nifty IT declining around 0.5 per cent after gains in the previous two sessions as investors booked profits amid uncertainty over global technology spending and U.S. market cues. Financial stocks saw selective buying, particularly gold financing companies. IIFL Finance, Muthoot Finance and Manappuram Finance gained between 2 per cent and 8 per cent following positive sector commentary and fresh coverage from global brokerage JP Morgan.

Energy-linked stocks also remained in focus as Brent crude prices moved higher amid continued geopolitical tensions in the Middle East. Higher crude prices remain a concern for inflation and corporate margins.

Welspun Corp was among the biggest gainers, rising 11.8 per cent after securing its largest-ever single pipe supply order worth around USD 1.8 billion. Urban Company gained 4.4 per cent after UBS initiated coverage on the home services platform with a positive view and a price target of Rs 180. Niva Bupa Health Insurance declined around 2 per cent after the insurance regulator restricted the company from opening new branches for six months over regulatory concerns.

Institutional flows continued to provide support to the domestic market. On August 20, Foreign Institutional Investors were net sellers of Rs 583.36 crore, while Domestic Institutional Investors remained strong buyers with net purchases of Rs 3,537.71 crore in the cash segment. Strong buying by domestic institutions has helped cushion the impact of continued foreign selling and provided stability to Indian equities.

Global markets remained cautious as Asian equities faced pressure from rising bond yields and higher energy prices. Brent crude moved towards a one-month high amid continuing Middle East geopolitical tensions, raising concerns over inflation and corporate profitability. Investors are also tracking U.S. market cues and global bond yields, which remain important for emerging markets such as India. Movements in crude oil, bond yields and global risk appetite are likely to influence the near-term direction of Indian equities.

Market Update at 09:30 AM: The benchmark equity indices, Sensex and Nifty 50, opened marginally higher on Friday as the global equities rally paused, while long-dated U.S. Treasury yields steadied.

At 9:17 AM, the Sensex gained 49.70 points, or 0.06 per cent, to 77,587.42. The Nifty 50 rose 17.75 points, or 0.07 per cent, to 24,249.60.

Broader market performance remained mixed. The Nifty MidCap index slipped 0.04 per cent, while the Nifty SmallCap index advanced 0.44 per cent.

Among sectoral indices, Nifty IT, Nifty Auto and Nifty FMCG were the biggest laggards in early trade. Meanwhile, Nifty Realty emerged as the top-performing sector.

The primary market will remain active on Friday, with several mainboard and SME IPOs open for subscription.

Augmont Enterprises' Rs 825 crore IPO will open for subscription today. Meanwhile, Tempsens Instruments (India)'s Rs 650 crore public issue will enter its second day of bidding.

Gaja Alternative Asset Management's Rs 550 crore IPO will enter its final day of subscription.

In the SME segment, the IPOs of Dhanwel Hybrid Seeds and Mopshop Distribution will also open for subscription, marking the final day of their respective offers.

Pre-Market Update at 7:40 AM: GIFT Nifty was trading around 24,332, indicating a positive start for the Indian stock market on Friday, August 21. GIFT Nifty signalled an opening gain of around 44 points.

The positive opening indication follows Thursday's recovery, when the Nifty 50 snapped its seven-session losing streak and gained 153.05 points, or 0.64 per cent. The benchmark recovered from lower levels but formed a small-bodied candle, suggesting that the market may be entering a consolidation phase rather than confirming a decisive trend reversal.

U.S. stock markets ended sharply lower on Thursday as rising Treasury yields, elevated crude oil prices and renewed inflation concerns weighed on investor sentiment. The S&P 500 declined 0.9 per cent to 7,641.16, while the Dow Jones Industrial Average fell 1.3 per cent to 52,759.21. The Nasdaq Composite dropped 1 per cent to 26,067.17.

Higher U.S. Treasury yields remained a key concern for global equities, as rising borrowing costs can put pressure on stock valuations. Weakness in Walmart shares amid concerns over consumer spending also affected sentiment, while rising crude oil prices added to inflation worries.

Asian markets opened on a mixed note on Friday as investors assessed rising global bond yields, higher energy prices and concerns around global growth. Japan's Nikkei remained sensitive to movements in global bond markets, while Hong Kong and mainland Chinese equities tracked expectations around growth and policy support. South Korea's Kospi remained relatively stronger, supported by technology stocks.

Overall, risk sentiment across Asia remained cautious as investors monitored the outlook for interest rates, energy prices and global economic growth.

Brent crude traded above USD 93 per barrel on Friday and was on track to post a second consecutive weekly gain, rising more than 5 per cent so far this week. West Texas Intermediate crude gained around 3 per cent to USD 88.15 per barrel, with concerns over potential supply disruptions keeping prices elevated.

Higher crude oil prices could increase pressure on downstream sectors. Oil marketing companies may face concerns over marketing margins, while aviation companies could see higher fuel costs. Paints, chemicals and Logistics companies may also face increased input costs.

Gold remained firm amid safe-haven demand. Spot gold was trading near USD 4,514.23 per ounce and had gained around 3.2 per cent during the week. Silver was trading around USD 68.03 per ounce. Meanwhile, the U.S. 10-year Treasury yield remained elevated near 4.7 per cent. Higher U.S. yields can reduce the attractiveness of emerging-market assets and influence foreign institutional investment flows.

The Dollar Index weakened, supporting precious metals. The Indian rupee is likely to remain sensitive to crude oil prices, foreign fund flows and movements in the U.S. dollar.

The Nifty 50 closed at 24,231.85 on Thursday, gaining 153.05 points, or 0.64 per cent. The index opened higher and remained in positive territory for most of the session before witnessing some profit booking near the highs.

Foreign institutional investors (FIIs) turned net sellers in the Indian cash equity market on August 20, selling shares worth Rs 583.36 crore. FIIs recorded gross purchases of Rs 11,411.73 crore and gross sales of Rs 11,995.09 crore during the session.

Domestic institutional investors (DIIs) continued to provide strong support to the market, remaining net buyers for the session. DIIs purchased equities worth Rs 3,537.71 crore, with gross buying at Rs 16,932.72 crore and gross selling at Rs 13,395.01 crore.

Several domestic developments are likely to remain on investors' radar. SEBI has directed brokers to accept orders during the five-minute transition period before the Closing Auction Session from September. The move is aimed at improving liquidity and price discovery.

LIC has received approval from the RBI to increase its stake in HDFC Bank up to 9.99 per cent, supporting sentiment towards the banking major. Corporate earnings have also remained a positive domestic factor, with Nifty 50 companies reporting average profit growth of around 18 per cent in the June quarter, marking the strongest growth in 10 quarters.

Foreign portfolio investors have also reportedly turned buyers in August, with equity inflows of Rs 16,621 crore during the first half of the month, supporting domestic market liquidity.

Tata Sons will remain in focus amid uncertainty surrounding its classification as an upper-layer NBFC and potential listing requirements. The development could have implications for sentiment across Tata Group companies.

HDFC Bank is likely to remain in focus after LIC received approval to increase its stake in the bank up to 9.99 per cent. Reliance Industries gained 0.62 per cent on August 20 amid the broader market recovery.

Power Finance Corporation and REC remain under pressure following rating changes and revised expectations surrounding the power financing space. LIC Housing Finance will also remain on investors' radar ahead of its Dividend record date.

ONGC and BPCL could remain sensitive to elevated crude oil prices. While upstream companies may benefit from higher crude prices, downstream companies could face pressure on margins. RailTel Corporation and Exide Industries will also remain in focus due to company-specific developments and result-related updates.

The banking sector could receive support from LIC's increased stake approval in HDFC Bank and stable credit growth trends. Energy stocks are likely to remain in focus as elevated crude prices affect upstream and downstream companies differently. IT stocks may react to overnight weakness in U.S. technology shares, along with movements in Treasury yields and broader global risk sentiment.

Overall, GIFT Nifty indicates a positive start for the Nifty 50 after Thursday's recovery. However, elevated crude oil prices and high U.S. Treasury yields remain key risks for the market. Investors will closely track global market movements, energy prices, institutional flows and stock-specific developments for further direction.

Disclaimer: The article is for informational purposes only and not investment advice.

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