Editor's Take: Will Nifty, Sensex recovery sustain? ‘Friday Fear’ may cap market rebound, warns Anil Singhvi

Nifty, Sensex Today: Indian markets are likely to open with a gap-up bias on Friday, tracking recovery in GIFT Nifty, which was trading at 23,217, up 97 points or 0.42 per cent.

This comes after a sharp selloff on Thursday that wiped out over Rs 11.5 lakh crore in market capitalisation of BSE-listed firms. Total market cap fell to a little over Rs 427 lakh crore.

The benchmark indices saw steep losses. The Sensex crashed 2,497 points to close at 74,207. The Nifty 50 tumbled 776 points to settle at 23,002, briefly slipping below the 23,000 mark during the session.

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Zee Business Managing Editor Anil Singhvi said investors should remain cautious despite early signs of recovery, as volatility remains high and global cues are still uncertain.

Why GIFT Nifty is recovering

Singhvi said the rebound in GIFT Nifty is largely driven by a sharp correction in crude oil prices and hopes that geopolitical tensions may not escalate further.

Markets are also technically oversold, which increases the probability of short-term recovery or short covering.

Crude oil cools off after double top near $119

Crude oil remains the biggest driver of sentiment. Prices formed a double top near $119 and then corrected nearly 12 per cent to around $106.

Oil is now back in the $100–$106 range. This reduces pressure on inflation and import costs.

The fall comes as global signals hint at possible de-escalation. Israel’s Prime Minister expressed hope that the conflict may end soon. There are also expectations that the US may ease restrictions on Iranian oil stuck at sea.

At the same time, global efforts are being made to keep the Strait of Hormuz open. However, Iran’s aggressive stance, including a proposed toll on shipments, keeps risks elevated.

FII selling remains a key overhang

Singhvi flagged heavy selling by foreign institutional investors (FIIs) in both cash and derivatives segments as a major concern.

This outflow has been a key reason behind the recent market fall. In contrast, domestic institutional investors (DIIs) showed only marginal buying.

He added that DII buying remained limited partly due to a bank holiday, which impacted SIP inflows.

Positive triggers for the market

• Sharp fall in crude oil prices
• Signals from the US and Israel to avoid escalation
• Oversold market conditions
• Continued domestic institutional support

These factors could support a near-term bounce.

Key risks investors should track

• Heavy FII selling in cash and F&O
• Volatility in crude oil prices
• Weak US market cues
• Indian rupee near lifetime lows
• Aggressive statements from Iran
• Risk of a wider energy and economic conflict

Markets are also under pressure due to fears of rising inflation, which is impacting rate-sensitive sectors.

Friday Fear: why traders stay cautious

Singhvi said “Friday Fear” may cap the recovery. Traders remain cautious ahead of weekends due to uncertainty over global developments.

There is always a risk of sharp gap-up or gap-down moves on Monday depending on news flow.

Even if markets open strong, profit booking at higher levels is likely.

Trading strategy: use bounce to lighten positions

Singhvi advised investors to use any gap-up opening to exit weak or stuck positions.

He said that after Thursday’s sharp fall, positions have already become lighter, which may trigger some short covering.

However, he cautioned against aggressive buying until volatility cools and trends become clearer.