Sensex rises 200 points, Nifty above 24,100 amid Middle East jitters. What lies ahead?

The Indian stock market continued to show resilience amid uncertainties around escalating conflict in the Middle East, with Sensex and Nifty gaining up to 0.3% each on Thursday.

Sensex rose over 200 points 77,388 while Nifty 50 gained around 64 points to 24,142 during Thursday's trading session. This came as India VIX, which measures volatility in the stock market, dropped 3.5% to 13.27.

IT stocks, including HCL Tech, Infosys, Tech Mahindra and TCS, were the top gainers on Sensex, rising 1-3%. Trent, Maruti Suzuki, M&M and Titan shares meanwhile gained nearly 1% each. Bucking the trend, Axis Bank, Bajaj Finserv, SBI and HDFC Bank shares lead losses on the benchmark index, trading marginally lower.


Broader markets also traded in the green, with Nifty Midcap 100 and Nifty Smallcap 100 indices gaining up to 0.5%. Sectorally, Nifty IT lead gains after rising nearly 2% in the morning trading hours. Nifty Financial Services and Nifty PSU Bank meanwhile slipped into the red. The overall market breadth was positive, with NSE seeing 1,662 advances and 749 declines, while 112 stocks remained unchanged.

Iran-US conflict escalations
Geopolitical worries continue to hang like a dagger over Dalal Street, although the bulls seem to ignore them now after the prolonged selloff earlier this year. Fewer vessels travelled through the Strait of Hormuz on Wednesday, the first day after the US reimposed its naval blockade on Iranian ports with both countries escalating strikes across ‌the Gulf, ⁠Reuters quoted shipping ⁠data as showing.

Around seven vessels crossed the Strait on Wednesday, down from 13 recorded in the previous day. Meanwhile, hostilities intensified since Iran said during the weekend that it had closed the Strait of Hormuz, a critical waterway that accounted for 20% of daily global oil and gas supply shipments before the war.

Oil prices remained muted, with Brent crude futures falling below $85 per barrel and WTI Crude futures trading below $80 per barrel. While they have inched down slightly, oil prices have recorded sharp gains from last week’s lows.

Rupee nearly unchanged
Rupee opened at 96.2475 against the US dollar, nearly unchanged from the previous closing level of 96.2550. “While the softer dollar offered temporary support, higher energy prices remain a key concern for India’s import bill and the rupee’s outlook. Market participants will continue to track foreign fund flows, crude oil movement, and upcoming US economic data for further direction. Technically, the rupee is expected to trade in the 95.75–96.45 range in the near term,” said Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities.

Meanwhile, foreign investors remained net sellers of Indian equities on Wednesday, net selling shares worth around Rs 736 crore, according to provisional data on NSE. However, FIIs have remained net buyers on Dalal Street for nine out of 11 trading sessions in July so far.

What lies ahead?
With no major changes in crude prices and global markets holding steady, Indian stock market is likely to trade in a narrow band with a positive bias, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. With many companies reporting their Q1 results in the coming days, the market is likely to respond to the results, he noted.

“Financials-both banks and NBFCs- are likely to report good set of numbers aided by robust credit growth now running at 18%. Automobiles is a sector to watch closely since the growth numbers for Q1 would be impressive and the sector continues to exhibit momentum, aided by GST cuts and easy availability of finance. Most segments of the sector -cars, SUVs, two-wheelers, commercial vehicles, exports- are doing well. Digital platform companies, too, will be reporting good growth numbers. Announcement of bonus issue by Paytm in the July 20th board meeting is an important news,” according to the analyst.

Technical view on Nifty
Bajaj Broking expected Nifty 50 to extend the recent consolidation and trade in the range of 23,800-24,350. “Within the consolidation last Friday’s gap area and Monday's low of 24,000-23,950 will act as immediate support, holding above the same will lead to pullback towards 24,250-24,350 levels being the upper band of the recent consolidation range," it said..

"Short term support is placed at 23,800-23,900 levels being the confluence of the almost identical low of the last 4 weeks and 50 days EMA. While only a breakout above 24,350 will signal strength and open upside towards 24,600 levels being the high of April 2026," the domestic brokerage further said.

(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)