Markets Experience Subdued Activity Amidst Concerns Over Oil Supply and Elevated Valuations

The market opened on a subdued note on Monday, influenced by concerns over potential oil supply disruptions in the Red Sea and high valuations, impacting investor sentiment, according to Vinod Nair, Head of Research at Geojit Financial Services. The benchmark indices closed in the red, with Nifty down 0.18% at 21,418.70, and Sensex down 0.24% at 71,315.09. Looking ahead, global attention will be on the Bank of Japan's monetary policy and UK inflation data. Nair anticipates a near-term consolidation in the market due to unfavorable risk-reward dynamics, concerns over El Nino, and a slowdown in global GDP. Rupak De, Senior Technical Analyst at LKP Securities, notes a potential interruption in the ongoing rally based on the Nifty's daily chart and signals from the RSI indicator. A correction may occur if the index falls below 21,350, with short-term support at 21,220/21,100, while resistance is expected at 21,500.

Key Points:

1. The market displayed a subdued start on Monday due to concerns regarding potential disruptions in oil supply through the Red Sea and apprehensions about elevated valuations, affecting investor sentiment, as mentioned by Vinod Nair, Head of Research at Geojit Financial Services.

2. Benchmark indices closed in the red, with Nifty down 38.00 points (0.18%) at 21,418.70 and Sensex down 168.66 points (0.24%) at 71,315.09 on Monday.

3. Global focus is directed towards the Bank of Japan (BOJ) monetary policy and UK inflation data. Near-term market consolidation is expected due to unfavorable risk-reward ratios, concerns over El Nino, and a slowdown in global GDP, according to Nair.

4. Rupak De, Senior Technical Analyst at LKP Securities, noted a potential interruption in the ongoing market rally based on a pattern observed on the daily chart of Nifty. The RSI indicator on the hourly timeframe also suggests decreasing bullishness with a bearish crossover within the oversold zone.

5. De indicated the possibility of a correction towards 21,220/21,100 in the short term if Nifty falls below 21,350, while resistance is anticipated at 21,500 on the higher end.

(With Agency Inputs)