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Informist, Friday, Apr. 24, 2026

By Arundathi A R

MUMBAI – Prevailing negative sentiment in the domestic equity market is likely to continue in the near term due to a surge in crude oil prices and unsettled concerns about the West Asia war. Crude prices, which climbed again over $100-per-barrel level, remained an overhang for equity indices to reverse the trend, analysts said. 

"I don't think the government will raise the retail prices of petrol and diesel by over INR 20 per litre, as it will have a large inflationary effect on the Indian economy," Mangesh Bhadang, assistant vice president of Investments at Avvashya Capital, said. "It can be raised only gradually and not more than INR 5–INR 6 per litre." He also expects consequent supply chain disruption on a large scale due to the Iran war, which will disturb manufacturing and other facilities.

Brokerage Kotak Institutional Equities Thursday said it expects retail prices of petrol and diesel to rise sharply after the ongoing state assembly elections due to elevated crude oil prices. The brokerage sees a hike of INR 25–INR 28 per litre, with the Indian crude oil basket at $120 per barrel and low fixed margins for petrol and diesel prices. The government will eventually have to take a large hike in petrol and diesel prices if crude oil stays above $100 a barrel, Bhadang of Avvashya said. "This could result in an interest rate cycle going up with an inflationary outlook," he said.

Friday, the Nifty 50 settled at 23897.95, down 1.1% or 275.10 points. The BSE Sensex ended at 76664.21, down 1.3% or 999.79 points. Analysts see the Nifty 50 facing resistance at 24200 points and finding support at 23630 levels.

Global brokerages JP Morgan and HSBC downgraded their recommendations on Indian equities citing multiple reasons. JP Morgan downgraded its recommendation on Indian equities to 'neutral' from 'overweight'. It also cut its target price on the Nifty 50 due to elevated valuations compared to emerging market peers, earnings risks, concerns of dilution, and limited exposure to next-generation technology. JP Morgan has cut the 50-stock index's bull case target to 30000, down 9% from the earlier target. For the base case, the brokerage has cut the target to 27000 from 30000. The index's bear case aim was trimmed to 20500 from 24000.

HSBC has downgraded Indian equities to 'underweight' from 'neutral', as potential inflation and demand pressures are likely to pose a threat to the durability of India's earnings recovery. It expects valuations to be expensive again if earnings estimates are trimmed, despite moderation from their recent highs.

Foreign institutional investors continued their selling spree and offloaded shares worth INR 32.5 billion Thursday. Meanwhile, domestic investors turned buyers after selling Wednesday. They bought shares worth INR 9.41 billion in the previous session. Foreign investor sentiment remains cautious as a sharp depreciation in the rupee against the dollar weighs on their returns, HSBC said in a report. The increased focus of investors on potential implications of artificial intelligence, particularly for software services, is expected to limit foreign inflows, according to the brokerage.

Market participants will also watch out for the March quarter results of Nifty 50 major Axis Bank, scheduled for Saturday. The bank is expected to report a net profit of INR 69.36 billion, down nearly 3% on year and almost unchanged from the previous quarter. Its net interest income is likely to rise nearly 7% on year to INR 147.19 billion in the reporting quarter.  End

Edited by Tanima Banerjee

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