Indian equity markets experienced a volatile trading session on Monday, with key benchmarks Sensex and Nifty recovering significantly from their intraday lows, yet still closing in negative territory. The market sentiment remained subdued as investors grappled with increasing crude oil prices and escalating geopolitical tensions, particularly in the Middle East.
At the close of trading, the 30-share BSE Sensex was down 191.95 points, or 0.25 percent, settling at 77,817.30. Similarly, the broader NSE Nifty50 index shed 35.10 points, or 0.14 percent, to finish at 24,330.90. Market breadth on the BSE was weak, with 2,374 stocks declining against 1,899 advancing, while 265 remained unchanged out of 4,538 traded.
Analysts Weigh In on Market Uncertainty
Market expert Avinash Gorakshkar highlighted the current uncertain phase. “Markets are now in an uncertain phase. We need to have a little more clarity on the geopolitical situation before the market starts recovering again. I think a sector-specific approach would be the right strategy, and the broader market offers better opportunity at present,” Gorakshkar stated.
Ravi Singh, Chief Research Officer at Master Capital Services, noted that the Nifty continues to face pressure from elevated crude oil prices and ongoing Middle East tensions. Brent crude, hovering around $89 a barrel after a more than 5 percent gain last week, is fueling concerns about inflation and corporate margins. However, Singh observed a silver lining: “In the latter half of several sessions last week, the indices witnessed recovery from intraday lows, indicating that buying interest is still emerging at lower levels.”
Small and Mid-Caps Outperform Large-Caps
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, echoed concerns about crude prices. He stated, “Crude trading at $89 per barrel, without any prospects for an immediate resolution to the crisis, is likely to cap any uptrend that may emerge.” Vijayakumar also pointed out the underperformance of IT majors and large banking names, which are weighing down the Nifty.
For investors seeking short-term gains, Vijayakumar advised looking beyond the Nifty 50. “Plenty of stock-specific action is likely in the small- and mid-cap space. A significant trend from the Q1 results season is the big outperformance of the broader market. The outperformance of the SMIDs in Q1 is likely to continue for the rest of the year, too,” he added, suggesting a shift towards smaller and mid-sized companies for better opportunities.