The equity market opened with strong gains on Tuesday, April 21, with the Sensex jumping 484.73 points or 0.62% to 79,005.03 and the Nifty 50 rising 128.70 points or 0.53% to 24,493.40. However, GIFT NIFTY futures fell over 150 points on Wednesday morning, indicating a weak opening for April 22. As per Upstox, the broader market outperformed with the BSE 150 MidCap Index gaining 0.80% and the BSE 250 SmallCap Index adding 1.11%. Market breadth remained strong with 2,741 shares rising and 1,028 shares falling on the BSE. The Nifty Media index jumped 1.34% to 1,448.55, extending its winning streak to six consecutive trading sessions with a 6.48% gain during this period. The positive sentiment was supported by optimism over potential peace talks between the US and Iran, along with easing crude oil prices. However, crude oil prices soared over 5% on Tuesday evening after the US and Iran parted ways from negotiation talks, with the US markets closing in red and Asian markets opening mixed. GIFT NIFTY was trading around 24,210 level, a discount of nearly 171 points from the Nifty futures' previous close, indicating a negative start for the Indian stock market indices.
Indian equities extended losses for the third consecutive session as escalating tensions between Iran and the US continued to weigh on market sentiment. The Sensex declined 180 points to open at 77,484 while the Nifty 50 fell over 72 points to begin the session at 24,100. According to The Economic Times, India VIX, which measures volatility in the markets, gained 0.34% to 18.66 in the morning session. Despite previous hopes of tensions in the oil-rich Middle East easing soon with a second round of negotiations between Iran and the US, worries seem far from over. The US continues to blockade the Strait of Hormuz, while Iran has used a swarm of small, fast boats to seize at least two container ships near the critical waterway. As per The Economic Times, Brent crude futures were trading near $106 per barrel, while WTI crude futures were hovering near $96 per barrel. Oil prices have resumed their upward trajectory, crossing the key psychological mark of $100 after falling below the level earlier this month. Oil prices had crossed the $100 per barrel mark earlier in March following the outbreak of the war between Iran and US-Israel, marking the first time since Russia's invasion of Ukraine in 2022.
The IT sector emerged as the top sectoral loser, with the Nifty IT declining more than 1% to buck the broader market trend. Infosys shares were the top losers on the Sensex, falling more than 3% after the IT major's Q4 earnings announcement failed to cheer up investors. Other IT stocks, including HCL Tech and TCS, also tumbled significantly. According to The Economic Times, around 1,044 stocks declined on the exchange, while 1,309 advanced and 118 remained unchanged. However, Mahindra & Mahindra (M&M), L&T, IndiGo and a few other stocks were trading in the green with marginal gains. The current quarter was impacted by weak discretionary demand in the telco vertical and softer US government renewals around software platforms. Management flagged a highly volatile demand environment shadowed by tariffs and softened discretionary spending, providing FY27 growth guidance of 1-4% in constant currency. The Nifty IT index is expected to be the key stock to watch today after HCLTech's disappointing results, with the index crossing important levels of 24,300 and 24,500.
Despite the overall market weakness, broader markets continued to outperform with the Nifty Midcap 100 and Nifty Smallcap 210 indices gaining up to 0.5%. As per The Economic Times, this indicates selective buying despite overall market weakness. The Nifty Realty bucked the trend to rise around 0.7%, while the Nifty Realty index emerged as the top sectoral gainer on the NSE. The Nifty 50 closed over 200 points lower for the second consecutive day, indicating increased selling pressure at higher levels. The index also failed to hold the hourly 20 EMA levels of 24,305 on a closing basis, reversing the setup from bullish to mildly bearish. The downside remains protected at 20 and 50 EMA levels in the near term, and the resistance now remains at 24,800 levels. The initial buildup for the coming monthly expiry on April 28 suggests that 24,500 remains a crucial support level for the index, with 24,500 puts holding the highest open interest indicating downside protection. On the flipside, 25,000 calls hold the highest open interest, indicating strong resistance for the expiry.
Market experts continue to monitor the escalating geopolitical tensions between Iran and the US as a key driver of market volatility. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that the market has been continuously responding to bad news and hopes emanating from a potential deal on the West Asia conflict. He added that mid- to long-term market direction will emerge only from clarity on the conflict resolution, particularly on the opening of the Hormuz Strait. According to The Economic Times, FPIs have again turned sellers this week after buying for three days last week, which, along with the spike in crude, has again dragged the rupee down to the 94.11 level. Vijayakumar noted that poor guidance from IT majors indicates that large-cap IT stocks will continue to be weak despite the low valuations. Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd. had previously noted that "Indian markets are expected to consolidate in the near term as investors continue to monitor developments in the US–Iran conflict and the ongoing US blockade of the Strait of Hormuz." The analyst expects that till then, crude prices will continue to fluctuate, impacting the market in the process.
