Indian equity markets demonstrated remarkable resilience during a week dominated by Brent crude hovering above $100 per barrel - roughly 40%-60% higher than February levels, according to market expert Nischal Maheshwari. However, the latest developments reveal supply chain disruptions are becoming increasingly severe, with JP Morgan commodities analyst Natasha Kaneva warning that oil inventories have acted as a 'shock absorber' for the global economy but could reach 'operational stress levels' across OECD countries as soon as next month. As per Boston Consulting Group trade expert Tim Figures, European consumers are likely to face higher prices even without outright shortages, as "any of these things are global commodities and, as the supply diminishes, the price goes up." The expert believes investors are betting on an eventual resolution between Iran and the United States, with Maheshwari noting that "the market is at the moment telling you that this is likely to get sorted."
The banking sector witnessed mixed reactions during the week, particularly after State Bank of India's earnings performance disappointed investors. However, Maheshwari believes the broader trend in financials is undergoing a transition. "SBI has performed very well in the last one to one-and-a-half years. It is a good time to take away some profits and move to the largecap private sector banks now," he said. The expert noted that PSU banks have already delivered substantial returns over the past year, and investors may now find better value in private sector names such as HDFC Bank and ICICI Bank. He highlighted that valuations in several large private lenders are currently attractive, especially with HDFC Bank trading near historically low price-to-book multiples.
Among sectoral performers, automobiles and defence stocks stood out during the week, yet Maheshwari sounded cautious on passenger vehicle makers after the sharp rally witnessed in the segment. "Autos have run quite a bit," he said, adding that the benefits from lower GST rates and favourable demand conditions appear to be largely priced in. He also warned that interest rates may have already bottomed out globally, which could limit future demand momentum in the passenger vehicle segment. Instead, he remains more constructive on commercial vehicles, where the cycle continues to strengthen steadily, stating "The CV cycle is still picking up well."
The defence sector, which has seen a meaningful correction in recent months, is once again appearing attractive to long-term investors. Maheshwari noted that several defence companies have delivered strong quarterly numbers while also undergoing both time and value corrections in their stock prices. "Some of these stocks are now emerging as good bets given that they have very strong order books," he said. The improving visibility of execution pipelines and sustained government focus on defence manufacturing continue to support the sector's long-term outlook.
Domestic equity benchmarks ended sharply lower on Friday amid rising geopolitical tensions between the US and Iran, rupee weakness and heavy profit-booking in financial stocks. The Nifty declined 150.50 points (0.62%) to settle at 24,176.15, while the BSE Sensex dropped 516.33 points (0.66%) to end at 77,328.19. Technical analysts noted that the Nifty slipped below key technical levels, with the index moving below the 50 EMA on the intraday timeframe and the RSI re-entering a bearish crossover. However, market expert Nilesh Jain from Centrum Finverse noted that the index managed to hold above its 21-DMA support placed near 24,140 levels on a closing basis, with momentum indicators showing signs of improvement. The broader structure continues to remain sideways to positive, with a gradual recovery towards 24,300-24,500 levels likely in the near term, while the crucial support of the 50-DMA is placed around 24,000 levels.
