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Informist, Tuesday, May 26, 2026

 

By Arundathi A R

 

MUMBAI – The domestic equity market is likely to remain range-bound Wednesday as global cues surrounding the US-Iran negotiations and the reopening of the Strait of Hormuz remain uncertain. The strikes by US forces in southern Iran and the subsequent rise in crude oil prices to around $100 a barrel again dampened market sentiment. Foreign investment flows and rupee movements are other factors that investors will watch. On the earnings front, Oil and Natural Gas Corp. will be in the spotlight as its March-quarter earnings are due later Tuesday.

 

"On the macrofront, challenges will continue for a few more quarters," said the director of research at an asset management company. "Inflation is likely to increase as the price pass-through has started to happen on both the government and company sides," he said. Earnings recovery is largely expected in the December and March quarters of FY27.

 

Tuesday, the Nifty 50 settled 0.5% lower at 23913.70 and the BSE Sensex ended 0.6% lower at 76009.70 points. The Nifty 50 index closed below the 24000 level, bucking a 10-session trend on Monday when it closed above the psychologically crucial level.

 

"On the levels front, 23800-23700, the confluence of 20 DEMA (double exponential moving average) and previous week closure represents a cushioning zone, followed by the sacrosanct support of 23600 zone," Osho Krishan, chief manager of technical and derivative research at Angle One, said in a note. "On the flip side, a sustained move above the 24000-24050 hurdle would reaffirm bullish momentum and potentially pave the way for an advance towards the 24300-24350 resistance zone in the near term. Going ahead, any decline towards the aforementioned support zone is likely to attract buying interest, thereby favouring a 'buy on dips' strategy in the current market setup," he said.

 

ICRA said Monday that it expects India's headline CPI inflation to average 5% in 2026–27 (Apr-Mar), due to recent increases in the retail prices of petrol and diesel. Inflation could rise to 5.3% if average crude rises to $105 a barrel, Nayar said.

 

ICRA Chief Economist Aditi Nayar expects inflation to exert some pressure on interest rates by the second half of the next financial year. "CPI inflation rate is likely to go in a range of 5.0–5.5%, and a 50–75 bps (basis points) increase could happen in (policy) interest rates, which will be in a staggered manner," he said.

 

At 1623 IST, the July futures contract of Brent crude oil was 2.5% higher at $98.51 a barrel. Nayar sees 6–9 months for crude oil prices to normalise. "Until there emerges a clarity regarding the reopening of the Strait of Hormuz, crude oil prices can be expected at the $85-$90 a barrel level.

 

Foreign institutional investors turned net buyers of equity on Monday, while domestic investors remained net buyers. Foreign portfolio investors net bought shares worth INR 8.22 billion on Monday, while domestic investors net bought shares worth INR 38.57 billion. Foreign flows are seen as range-bound, as markets have neither gone up much nor corrected, the director of research at the asset management company said. According to him, over the next few quarters, the primary driver would be domestic liquidity alone.

 

The biggest challenge for India's data centre industry is the inability to meet demand, as service providers are fragmented, even though the industry has entered a phase of rapid expansion driven by a rise in artificial intelligence-driven projects, cloud adoption, and evolving data localisation, KPMG said in a report. The industry is unable to deliver the scalable, compliant, and operationally integrated infrastructure solutions as there is no market leader yet, according to the report.

 

CareEdge Ratings sees the global economy entering a phase of weaker medium-term growth prospects. "The resurgence of inflation and rising fiscal risks raise the possibility of a renewed phase of monetary tightening or, at a minimum, a higher-for-longer interest rate environment," it said in a report. It sees the interest burdens remaining elevated across emerging economies.

 

Tuesday, the rupee fell against the dollar after rising for three straight sessions, as crude oil prices climbed again. The Indian rupee settled at 95.6800 per dollar, 0.5% lower than its previous close. "Although no major escalation has followed so far, the developments pushed crude oil prices higher by nearly 2.8%, which again increased pressure on the rupee due to concerns over India's import bill and inflation outlook," Jateen Trivedi, commodity and currency research analyst at LKP Securities, said in a note.

 

ONGC is expected to report a net profit of INR 87.02 billion, up nearly 35% on year. The oil exploration and production company's revenue is estimated at INR 363 billion, up nearly 4% on year. The stock closed 0.9% higher Tuesday.  End

 

US$1 = INR 95.68

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

 

Edited by Saji George Titus

 

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