Indian benchmarks retreat after early gains amid weak global cues and profit taking
The Sensex and Nifty slipped from early highs on Friday as global market weakness, rising oil prices and profit booking weighed on investor sentiment.
Indian benchmark indices pared early gains on Friday after a strong start, with the Sensex falling to 74,546.55 points and the Nifty to 23,062.30 points by mid-afternoon. The market retreat was attributed to several factors.
Weak global cues weighed on sentiment, as Asian markets slipped – South Korea's Kospi fell up to 4%, Shanghai's SSE Composite dropped 1.5% and Japan's Nikkei 225 lost more than 2%. Wall Street futures also declined, reflecting concerns over slowing earnings at major U.S. technology firms and the impact of recent inflation data.
Crude oil prices rose about 2% to roughly $117 a barrel on worries that the United States could resume military strikes against Iran, raising fears of regional turbulence and tighter energy flows.
Investors also booked profits after the sharp early rally, and foreign institutional investors ended a two-day buying streak by selling equities worth Rs 944 crore on Thursday.
Company-specific moves included Coal India slipping 2.5% after missing its profit outlook, Paradeep Phosphates dropping 11% and Thyrocare Technologies falling 6% following weaker September-quarter results.
"The zone of 22900 - 22920 for Nifty will act as a crucial support for the index, while the resistance lies in the zone of 23210 - 23230. On the downside, if the index slips below the level of 22900, then the next support is placed in the zone of 22730 - 22750," analysts at SBI Securities said.
The indices had risen over 1% in the previous session, buoyed by strong quarterly results from key constituents and the U.S. Federal Reserve's decision to keep interest rates unchanged.