Crude oil falls, Nifty-Sensex gains for the third week!

The Indian stock market registered gains for the third consecutive week as crude oil prices fell sharply to pre-Iran war levels and traffic normalized in the Strait of Hormuz. During weekly trading, Nifty registered a gain of 0.18 percent, while on the last trading day it closed at 24,056 with a rise of 0.14 percent.

Whereas Sensex closed at 77,100 with a gain of 109 points or 0.14 percent. During the entire week, Sensex registered a gain of 0.39 percent. The domestic stock market showed strength this week despite many mixed signals. However, there was mild selling pressure in the broader market, especially on midcap stocks.

According to market experts, geopolitical tensions eased as talks between the US and Iran progressed. Also, increased expectations regarding a possible trade agreement between India and America strengthened the confidence of investors.

However, due to increasing concerns over uneven monsoon distribution, fears of rising inflation and impact on rural demand are also emerging.

Experts believe that the continuous softening of crude oil prices is a positive sign for the Indian economy in the near future. This will improve inflation, fiscal deficit and current account position, giving the Reserve Bank of India (RBI) more flexibility in monetary policy.

Pharma and healthcare sector stocks were the best performers in weekly trading. There was also a rise in the shares of private banks, due to the clarity given by RBI regarding FCNR (B) Deposit Swap Scheme.

On the other hand, the metal sector remained under the most pressure due to fall in commodity prices. At the same time, due to concerns about consumer demand, weakness was also seen in shares of the consumer durables sector.

While the major indices posted gains, the broader market was mixed. The Nifty Midcap-100 index fell 1.15 per cent during the week, while the Nifty Smallcap-100 registered a marginal gain of only 0.03 per cent.

According to market analysts, 24,400 and 24,500 levels will remain the major resistance for Nifty in the near future, while 23,900 and 23,800 levels are considered to be strong support.

For Bank Nifty, 57,500-57,400 level is considered as major support and 58,900-59,000 level is considered as important resistance.

In the coming weeks, the quarterly results of companies will play an important role in deciding the direction of the market. Investors will keep an eye on management’s comments regarding companies’ demand, profit margins and order book.

A market expert said investors should adopt a balanced but positive strategy for now and look for investment opportunities in strong companies whose shares remain fundamentally sound despite the recent fall.

Investors will keep an eye on America’s PCE (Personal Consumption Expenditure) inflation data, which will be important in determining the direction of the global market. In addition, non-farm payrolls and unemployment rate data may also influence the interest rate policy of the US Federal Reserve.

According to experts, domestic industrial production (IIP) data and PMI (Purchasing Managers Index) for the month of June will give investors an early indication of the state of the economy ahead of the first quarter results.