Indian benchmark indices open mixed as Brent slips to USD 86 amid hopes of Hormuz progress

Indian benchmark indices opened on a mixed note on Wednesday, as Brent crude slipped to around USD 86 per barrel amid hopes of progress around the Strait of Hormuz. The Sensex opened higher, surging over 200 points, while the Nifty held above the 24,300 level.

Indian benchmark indices opened on a mixed note on Wednesday, as Brent crude slipped to around USD 86 per barrel amid hopes of progress around the Strait of Hormuz. The Sensex opened higher, surging over 200 points, while the Nifty held above the 24,300 level. The Sensex opened at 77,892.10 against the previous close of 77,656.09 and was trading at around 77,821.43, up 165.34 points or 0.21 per cent at the time of reporting. At the same time, the Nifty was trading at around 24,325.95, down 8.60 points or 0.04 per cent.

Sector-wise, most indices traded in the green, with Nifty PSU Bank emerging as the major gainer, surging 1.51 per cent during early morning trade. On the other hand, all broad-market indices traded in positive territory. On the NSE, SBI Life, ICICI Bank, Asian Paints, IndiGo, SBI, Axis Bank, Kotak Mahindra Bank, Hindustan Unilever, NTPC and Coal India, among others, were the major gainers. Infosys, Tata Steel, Bajaj Auto, Eternal, HDFC Bank and Reliance Industries, among others, were the major losers.

On the BSE, Eternal, ICICI Bank, Bajaj Finance, Adani Ports, Asian Paints, IndiGo, Kotak Mahindra Bank, NTPC and M&M, among others, were the top gainers, while Infosys, Tata Steel, Reliance Industries and BEL, among others, were the major losers. In the commodity market, Brent crude was trading at around USD 86.30 per barrel, while crude oil was trading at around USD 80.32 per barrel at the time of reporting.

Noting the correction in oil prices, Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, said, "Washington's much-anticipated sanctions package turned out less severe than markets had feared -- countries trading with Tehran will be given a deadline to wind down their links rather than face immediate penalties." According to Banerjee, the paper market is pricing in normalisation, but a word of caution is warranted, as physical recovery always lags the headlines. Traffic remains far below pre-war levels, mine risks and elevated war insurance persist, and history shows that shipping normalises over months, not days.

"That is why we see strong support at USD 80 to USD 82, with USD 90 to USD 92 now the resistance -- this becomes the operational range, and a genuine, sustained recovery in Hormuz flows would be needed to break the floor," he said. Adding to this, he said the trend remains bullish for precious metals, but gold is meeting resistance near USD 4,700.

"We expect an operational range of USD 4,580 to USD 4,680 for now, with the bigger uptrend intact as US fiscal concerns and central-bank buying continue," he said. Market analyst Vipin Dixena noted, "Today's market setup is more encouraging than what we have seen over the past few sessions. Brent crude has fallen towards the USD 86-87 range amid hopes of progress around the Strait of Hormuz, which is particularly positive for an oil-importing economy like India.

"Another factor I am watching closely is the return of FII buying. This combination gives me more confidence that the recent recovery has some institutional support rather than being purely short covering," he noted. Adding to this, he said, "From a technical perspective, Nifty has improved its short-term structure after reclaiming the 24,300 zone. I see 24,300 as the immediate support now, while 24,500 is the next important resistance. A sustained move above 24,500 could strengthen the recovery further, whereas failure to hold 24,300 could bring some profit booking back into the index." (ANI)