The domestic market is expected to remain under pressure as concerns over a possible resumption of US military strikes against Iran push West Texas Intermediate (WTI) crude oil prices into the $102–103 a barrel range. The prospect of a prolonged energy-price shock has raised concerns about its implications for India's macroeconomic outlook and the recovery in domestic equities.
“The domestic market is likely to remain under pressure, with a combination of escalating geopolitical risks, elevated crude oil prices and weak global cues weighing on investor sentiment. WTI crude has climbed to the $102–103 a barrel range amid concerns that the US could resume military strikes against Iran, raising the risk of a prolonged energy-price shock. For India, persistently elevated crude oil prices remain a key macroeconomic headwind, weighing on investor risk appetite and limiting the prospects for a sustained recovery in domestic equities,” said Ponmudi R, CEO of Enrich Money.
Despite the weak global outlook, benchmark indices Sensex and Nifty ended Thursday's session with gains of over 1%, supported by strong buying interest in banking, FMCG and IT stocks. Sentiment was also lifted by a decline in crude oil prices and the US Federal Reserve keeping interest rates unchanged.
The 30-share BSE Sensex surged 905.01 points, or 1.24%, to close at 74,151.04, its highest closing level in more than a week. Of its constituents, 26 stocks ended in positive territory, while four settled lower.
The 50-share NSE Nifty climbed 237.90 points, or 1.05%, to finish at 22,936.75.
“Markets staged a strong rebound on Thursday, gaining over 1% amid favourable cues and improved investor sentiment. After opening on a flat note, the Nifty crossed the key hurdle around 20 DEMA and gradually moved higher to settle at 22,936.75. The Sensex advanced over 900 points to close at 74,151 on the expiry day, reflecting improved risk appetite and renewed buying interest,” said Ajit Mishra, SVP – research, Religare Broking.
GIFT Nifty was trading around the 23,038 level, down nearly 15 points or 0.07% from the Nifty futures' previous close, indicating a flat opening for the Indian stock market indices.
Sensex Outlook
The Sensex staged a strong recovery on Thursday, closing at 74,151.04, up 905.01 points or 1.24%. The index opened at 73,268.47, touched an intraday low of 73,181.90 and advanced to a high of 74,166.16, finishing near the day's high.
The sharp upward move reflected renewed buying interest and an improvement in overall market sentiment.
On the Sensex outlook, Sachin Gupta, VP – Technical Research at Choice Equity Broking Private Limited, said the 73,200–73,500 zone is the immediate support area, while resistance is placed around 74,400–74,700. The broader trading range stands at 73,200–74,700, with the bias shifting towards sideways to bullish.
Sustaining the recovery and moving beyond the resistance zone could open the door for further gains, while holding above the support area will be important to maintain positive momentum.
“Going forward, the SENSEX outlook has improved to sideways to bullish, supported by strong buying, a bullish daily candle and improving RSI momentum. Holding above 73,200–73,500 will be crucial for sustaining the recovery, while a move beyond 74,400–74,700 could trigger further upside. However, the immediate 74,150–74,200 zone remains important to watch, given the moving-average and options-related resistance. Traders should monitor the index's ability to sustain above these levels before anticipating the next leg of the rally,” Gupta said.
Nifty 50 Outlook
Meanwhile, Vatsal Bhuva, Technical Analyst at LKP Securities, said the Nifty 50 has strongly reclaimed its 20-day moving average (20-DMA), accompanied by a consolidation breakout on the daily chart, indicating an improving price structure.
“Although 23,000 remains an immediate hurdle, the current setup suggests a high probability of the index moving towards its previous swing high of 23,175. The RSI has also witnessed a bullish crossover, supporting positive short-term momentum. As long as Nifty sustains above its 20-DMA and the crucial support zone of 22,800, the short-term outlook remains positive, with resistance at 23,175,” said Bhuva.
US Markets Performance
Wall Street witnessed a negative session on Thursday as disappointing technology earnings weighed on investor sentiment. Selling pressure intensified after market hours as further earnings announcements raised concerns over the sustainability of the artificial intelligence (AI) and technology trade.
Stocks across the AI and software segments remained under pressure.
The Nasdaq emerged as the biggest laggard, falling 1.4%. The weakness extended into the futures market, with Nasdaq futures plunging more than 500 points in early trade after post-market results from Amazon and Intel triggered a sell-off in their shares, adding further pressure on the index.
The Dow Jones Industrial Average ended 130 points lower on Thursday, recovering marginally from its intraday lows, while the S&P 500 declined 0.3%.
Meanwhile, S&P 500 futures were down 50 points on Thursday.
South Korea's Kospi Performance
Concerns over artificial intelligence investments, which triggered a sell-off in US technology stocks, weighed on South Korean markets on October 30.
The KOSPI plunged 4% in early trade, slipping below the 5,700 mark, as heavyweight stocks Samsung Electronics and SK Hynix declined sharply.
The KOSDAQ opened 2.05% lower at 736.76 and extended its losses to 729.38, declining 23.85 points or 3.17%.
Japan's Nikkei 225 Performance
Japanese equity markets opened sharply lower, with the Nikkei 225 declining 1.47%, as disappointing US technology earnings weighed on investor sentiment.
Concerns over Alphabet's slowing cloud business growth and massive capital expenditure plans fuelled worries on Wall Street about the returns on investments in AI infrastructure.
With global technology stocks facing renewed selling pressure and crude oil prices remaining elevated amid geopolitical risks, investors will closely monitor the opening moves in the Indian market and the ability of the Sensex and Nifty to sustain Thursday's recovery.
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