Indian stock markets are expected to open flat on August 21, as signals from the GIFT Nifty indicate a quiet start. While the previous session saw a strong rebound, investors remain cautious due to rising crude oil prices and high US bond yields despite recent global policy updates.
The Nifty and Sensex are expected to open on a flat to mildly positive note on Friday, August 21, with early indications from the GIFT Nifty suggesting levels between 24,330 and 24,348. This outlook follows a significant recovery in the previous session, where domestic indices successfully ended a seven-day losing streak.
A key factor influencing global sentiment is the US Treasury's recent plan to increase the buyback of longer-dated government bonds. Starting September 9, these buybacks will rise to $4 billion per operation. While this measure is intended to help manage government borrowing costs, it has yet to fully calm global investors, as 10-year US Treasury yields remain elevated near 4.70%.
Despite the potential relief from the bond buyback news, investors are dealing with fresh pressures. Global oil prices have recently climbed, with Brent crude surpassing $93 per barrel. For the Indian market, sustained higher oil prices are a significant concern as they can increase the country's import bill and contribute to inflationary pressure, which may weigh on the profitability of oil marketing companies and broader market sentiment.
Domestic market activity on August 20 showed a clear divide between foreign and local investors. Foreign institutional investors (FIIs) remained net sellers, offloading equities worth Rs 583 crore. However, this selling pressure was effectively absorbed by domestic institutional investors (DIIs), who provided support through net purchases amounting to Rs 3,537 crore.
From a technical perspective, the Nifty is currently facing overhead resistance in the 24,300 to 24,400 zone. If the index cannot move decisively above this range, it may trigger profit-taking by traders who are concerned about the sustainability of the recent rebound. The key monitorable for the market in the coming sessions will be whether indices can break through this resistance, alongside updates on crude oil price volatility and global bond market trends.