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Informist, Tuesday, Sept. 1, 2026

 

By Adhithya Aji

 

MUMBAI – Benchmark indices are expected to move in a range in the near term as higher crude oil prices and negative geopolitical cues are weighing on investor sentiment. The current lack of participation from foreign investors also remains an overhang for Indian markets, according to analysts. The November Brent crude oil futures contract was near $92 per barrel. 

 

Equity markets are expected to be under pressure in the short term as lower liquidity, along with higher crude oil prices, is adding to the weakness, according to Chokkalingam G, founder of Equinomics Research Pvt. Ltd. He said one major problem the market faces is low liquidity. "So like if you see FII also have been selling in secondary market and they are also investing in primary market. So one of the major problems is liquidity that is caused by FII selling in the secondary market," he said. 

 

The 'IPO boom' and selling by promoters of listed companies are diverting money from the secondary market. Moreover, because of continued IPO activity over the last two to three years, the number of listed stocks has increased substantially and market capitalisation has risen more than fivefold in the last 14 years, according to Chokkalingam. "Obviously you need a lot more liquidity to support this secondary market to continue to have momentum," he said. He added that external liquidity is also a problem as India needs more foreign investors to come in.

 

Chokkalingam expects external liquidity to improve once crude oil prices fall. This will improve the rupee outlook and attract overseas investment in Indian equities. "Domestic liquidity will improve if the IPO boom fizzles out. So unless the IPO boom fizzles out or oil prices fall badly, the market is likely to be volatile with a downward bias," he said. He expects the crude level at around $70 per barrel to be comfortable for Indian equity markets.

 

The Nifty 50 ended lower for the second consecutive session, and remained rangebound for over a week due to higher crude oil prices and renewed tensions between the US and Iran. Over the last seven days, the index shed over 1%. "Overall, we expect the index to extend the recent consolidation and trade in the broad range of 23,800-24,600 amid stock-specific action," Bajaj Broking said in a note. Most technical analysts expect the Nifty 50 to remain rangebound. Support for the index is estimated at around 23800-24000, while the resistance is seen at around 24150-24380, according to technical analysts. On Tuesday, the Nifty 50 closed 0.1% lower at 24055.80. "In the near term, market trends are likely to be driven by developments in energy markets, global monetary policy expectations, and capital flows into emerging economies," Vinod Nair, head of research at Geojit Investments, said in a note.  End

 

US$1 = INR 94.95

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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