Nifty 50 Rebound Driven by Crude Pullback and Eased Fed Rate Hike Fears
The Indian equity markets saw a relief rally on Monday, with the Nifty 50 gaining 133 points (0.60%) to close at 22,555.75. This uptick came after a four-session slide, driven by a pullback in Brent crude prices and positive market sentiment following weaker-than-expected US jobs data, which reduced concerns about a Federal Reserve rate hike.
Brent crude prices slipped to around $100-101 per barrel after the G7 announced plans to release 100 million barrels of oil, potentially leading to near-term consolidation. The weaker US jobs report also eased fears of aggressive rate hikes by the Fed, further supporting market sentiment.
Despite the gains, the India Vix rose by 1.47% to 14.67, indicating caution among investors. Analysts anticipate continued market volatility in the near term, suggesting the recovery was more of a pullback from oversold zones rather than a sustained trend.
Technical analysis suggests strong demand in the 22,000-22,200 support zone for the Nifty. Hitesh Rathi, a technical analyst at Angel One, noted that while prices closed below the rising trendline on Thursday, the support zone has historically seen strong demand, potentially leading to a bounce in the coming sessions.
Sector-wise, ITC, BSE, Shriram Finance, and NTPC were among the top gainers. Broader market indices like the Nifty Midcap 150 and Nifty Smallcap 250 also advanced by 0.5% and 0.4%, respectively. Tanvi Kanchan, associate director at Anand Rathi Share and Stock Brokers, highlighted that domestic banks and NBFCs performed well due to expectations of further rate hikes by the Reserve Bank of India.