“GLOBAL RISKS RISE: CRUDE OIL, SUPER EL NIÑO & INFLATION – IN FOCUS NIFTY STILL MAINTAINS THE STRUCTURE FOR 25,000”

Global markets shown strength following US markets making another All Time High but Indian Equity Markets remained under indigenous pressure. What’s driving this pressure? Well it’s the risk of Inflation due to continuous shortage of Crude Oil followed by high chances of Super Elnino arising which may additionally affect the Food inflation in India. India has already posted high WPI data for the month of April which resulted at 8.30% vs 3.30 MoM. And in the month of May India has already increased price of domestic petrol & diesel followed by ATF almost three times. All these indicate that inflation is no the thing of the imaginative future but its now into among us & could becomes worse if Super Elnino comes effective.

Nifty remained volatile whole last week & gave a nominal positive close of almost 75.80 points i.e. 0.32% but it restricted itself from breaching high or low’s of its subsequent week which resembles the indecisiveness among the investors / traders due to ongoing geopolitical issues. Brent crude remained the reason for overall volatility so far. This muted close of the broader markets let it be Nifty or Bank Nifty the indecisiveness remains a peculiar barrier.

FII’s remained aggressive sellers across the board with massive sell off of almost Rs. 7,572.83 cr. last week while DII’s remained net buyers with net buying of Rs. 16,948.10 cr. FII’s now once again turned the table where on 23^rd Jan.’26 was highest at 2.28 Lacs which eventually came down to as low as 1.03 lacs but closed the last week net shorts now at 2.25 lacs contracts it may now looks like positive bias from FII’s is likely to come.

Let’s take a dig on Super Elnino & its possible adverse outcomes with historical data:

🌍 What is El Niño?

El Niño occurs when:

• Pacific Ocean waters become abnormally warm
• Trade winds weaken
• Global weather patterns shift

This affects:

• Rainfall
• Temperatures
• Monsoons
• Cyclones
• Agriculture

Historically major Super El Niño years:

• 1982–83
• 1997–98
• 2015–16

For India, Super El Niño is extremely important because it can weaken the:

🌧️ Indian Monsoon

Possible effects:

• Below-normal rainfall
• Higher temperatures
• Lower crop yields
• Food inflation

📈 Broader Market Impact           

🚨 Negative for:

• Agriculture
• FMCG margins
• Rural demand
• Water-intensive industries

🚀 Positive for:

• Some commodity trades
• Power demand
• Select energy companies

🥇 Why to Track It Closely

Super El Niño can influence:

• Inflation
• RBI policy
• Food prices
• GDP growth
• Commodity markets
• Equity market sentiment

So far since the war between US-Iran-Israel begin it not only put Global Equities at risk but also other asset classes. But since this war is not likely to end very soon & speculations & exchange of comments are highly likely to remain intact, we expect its major repercussions may now gradually come to affect least the Equity markets & a gradual up move may soon begin in the entire Indian Equity markets.

For broader markets to ascertain the possible positive momentum few key major factors are likely to be considered & are likely to top out soon. So, far we have so many mix data developments across the board which has been the reason for volatility in Equities across the globe. Rupee, crude oil, Dollar Index, etc. Let’s dig it out one by one:

1. Rupee: Rupee hit another All-time low of 96.965 creating panic across the sectors specially banking & financials sectors but a positive flow is expected towards a cooling zone of 93 in few weeks’ time frame.
2. Dollar Index: This may hit 100-101 in near term.
3. Brent Crude oil: Brent crude oil hit another All-time high of 120.52$ per barrel & cooled off towards 102.81$. In the coming months we expect this to cool off towards 80-90$ somewhere as UAE exited the OPEC & OPEC+.
4. FII’s Remained Seller: FII once again remained on the sell side & it doesn’t look like any kind of easing up as of now. Not a good sign. But net index shorts hit higher at 2.38 lacs possible cool off has begun & settled last week at 2.25 lacs.

We now move into the final week of the May series with inevitable Monthly expiry intact within 2 days we continue to expect the possible breakout in the broader markets which has been lead by the “Nifty IT” with bottom formation & rise up almost 4.31% last week. This is just the beginning from one sector & it could now begin in Banking & financial sector as well with broader moves tend to positive, we expect a positive lead towards 24000 followed by 24600 & eventually 24900-25300 remains as a possibly inevitable move in the broader markets but these may take some more time almost of 2-3 weeks. However, on the downside 23000-23250 remains a crucial support level. This time the support could continue to come from Bank Nifty & IT Sector both.

Meanwhile Bank Nifty may now find its crucial support levels at 52700-53200 kind of levels & from those levels a meaningful upside can be seen towards 56700-57000 followed by 58000 kind of levels. The support may come from Private sector banks.

“Nifty IT” looks like has finally came near to support levels of 26000-27000 kind of levels to finally close this correction journey & from hereonwards as earlier anticipated so hit 30000 almost & it may continue to rise towards 33000 kind of levels very soon.

Brent crude oil hit another All-time high of 120.52$ per barrel & cooled off towards 102.81$. In the coming months we expect this to cool off towards 80-90$ somewhere as UAE exited the OPEC & OPEC+.

FII’s have been into net sell in 9 months out of 12 in current Fiscal year 2025-26 creating ruckus pressure on the entire markets. In the traders / investors community it has now become a basic question why they are selling? & When this selling would stop?

Why FII’s have been continuously selling in Indian Markets?

As the geopolitical issues continue to rise as US-Israel-Iran war leads a continuous decline in Rupee which hit all time low of 94.988 followed by inconsistent government policies into taxation in the capital markets & other things. Add on burden on the markets in respect to STT rate hike continuous pressure on FnO volumes reduction.

In recently launched GDP growth rate of India in Q2 has been 8.20%. At the same time, it is being projected that it will grow at 7.30% in the Fiscal year 2025-26 while USA has recently shown a GDP growth rate of 4.40% which is furthermore projected to grow at 4.70% so for a Developed economy which is showing nearly 5% of growth lately. In contrast, target country which is still a Developing country with a projected growth rate of 7.60% but its currency is declining on a fast scale why would any institutions go for a Emerging Markets when it can get a growth of nearly 5% in an already developed nation while saving currency devaluation risk. Isn’t it a safer investment for them?

Well, ofcourse yes this could have been a major reason for FII’s to relentlessly sell into the Indian Equity markets.

It has been more than 18 months now starting from October 2024 when Indian markets have consistently remained under pressure & each time some new news item comes to put the additional pressure on the domestic equity markets.

We clearly mentioned earlier that Nifty’s pressure only resembles the pressure of political will rather than fundamental one. FII’s selling has kept its pressure intact to the Indian domestic Equity markets as it went lesser last month the real realization came forward & now the Indian markets growth story rises & the politically backed selling with pressure from the Trump administration to diminish the Indian markets & create an artificial pressure to put an end to the Indo-Russia friendship remains untouched.

India remained on the higher ground on GDP data front where it achieved a milestone with historic growth rate of 7.80% in Q1, 8.20% in Q2 & 7.80% in Q3 of FY 25-26 completely mocking Trump’s “Dead Economy” jibe at its face where India remained on the Top-notch developing economy set for a target of $25 Trillion economy by 2047 on track. However, chairman of Reliance Industries Limited Mr. Mukesh Ambani said in its latest AGM last week that India has the capacity to achieve 10% GDP growth annually which once again has set another long-lasting futuristic goal for the entire economy.

FII & DII’s monthly data so far in the FY 2026-27 has been interesting where FII’s bought in few months initially then abstain from buying or remained to being on the sell side while DII’s remained the biggest supporter of the broader markets. The data below mentioned:

Brent crude oil hit another All-time high of 120.52$ per barrel & cooled off towards 102.81$. In the coming months we expect this to cool off towards 80-90$ somewhere as UAE exited the OPEC & OPEC+.

The Indian Equity markets have gained many recent news items where major of the news items are mentioned below:

• Rupee may now cool off towards 93.
• Dollar Index may remain hit 100-101.
• Brent crude oil hit another All-time high of 120.52$ per barrel & cooled off towards 102.81$. In the coming months we expect this to cool off towards 80-90$ somewhere as UAE exited the OPEC & OPEC+.

On the other side FII’s net longs now near to 10-11% & a recovery is possible towards 27% till the coming weekend which continuously signifies & now support could be within the range of 23000-23250 in Nifty.

In the wholesome broader markets witnessed some key events & their outcomes last week which are described as follows:

Domestic News:

1. The government may temporarily suspend cotton import duty from July to October amid rising prices and supply concerns from textile mills: BS India.
2. RBI is expected to keep the repo rate at 5.25% through FY27, according to India Ratings/BMI. The view suggests the current policy rate is already near the terminal level, so no further cuts are expected for now.
3. NCDEX is set to launch India’s first weather derivatives, starting with rainfall-linked contracts for Mumbai. The idea is to let traders and businesses hedge against monsoon risk using weather data rather than commodity prices.
4. Bollywood workers are facing sharp income declines as the industry slows, with many reporting 50–60% pay cuts, fewer projects, and delayed payments. The pressure is hitting freelancers and behind-the-scenes staff hardest, while rising Mumbai living costs are making things worse.
5. Iran’s Revolutionary Guards warned that if Iran is attacked again, the war could spread beyond the region.
6. Indonesia has announced curbs on palm oil exports to protect domestic supply and stabilize local prices. This move can tighten global edible oil markets and support palm oil prices.
7. H-1B visa applications drop 38% as the US tightens rules and gives preference to higher-salary candidates, reducing lower-wage and duplicate filings.
8. India shifts crude sourcing as Venezuela becomes the 3rd-largest oil supplier in May, overtaking Saudi Arabia and the US, driven by Indian refiners like Reliance Industries buying cheaper heavy crude amid changing global supply dynamics. India’s crude imports rose to 4.9 million barrels/day, while Saudi supplies nearly halved.
9. Gold prices fell for a second straight week as rising oil prices increased inflation concerns, strengthening expectations that the US Federal Reserve may keep interest rates higher for longer due to a resilient labor market and geopolitical uncertainty.
10. Brent Crude Futures Settle at $102.58/bbl, Falling 2.32% in Latest Session
11. Eicher Motors Limited has agreed to invest up to Rs 750 crore to acquire a 50% equity stake in Volvo Financial Services (India) Private Limited, forming a 50:50 joint venture with the Volvo Group.
12. Trump Announces 5,000 Additional US Troops to Poland After Nawrocki Election
13. Marco Rubio said the United States wants a stronger energy partnership with India and is looking to expand exports of energy products to the country.
14. Indian Gen-Z students are skipping campus placements and building startups straight from college. Engineering colleges are increasingly turning into startup hubs where students pitch ideas, prototype products, and raise funds before graduation. 

International news:The 

1. Philippines plans to raise up to 30 billion pesos through a Treasury bond maturing in July 2030 to fund government spending and manage borrowing needs.
2. The UK’s proposed steel quota cuts and higher tariffs are a near-term negative sentiment for Indian steel exporters, though the broader impact on India’s steel sector is likely limited.
3. South Korea to reduce long-term bond sales in June to stabilize markets and control rising bond yields
4. Bosch Limited has partnered with Brakes India Private Limited and Wheels India Limited to establish a 50:50 joint venture focused on engineering and manufacturing electronically controlled air systems for commercial vehicles.
5. The US is pushing to expand energy exports to India as Secretary of State Rubio visits New Delhi, signaling efforts to strengthen bilateral energy cooperation and trade ties.
6. Nvidia posts record $81.6 billion quarterly revenue on AI spending boom
7. Economists expect the Reserve Bank of India to start raising interest rates because inflation risks have increased again, mainly due to higher crude oil prices and rupee pressure.
8. SpaceX IPO-related disclosures highlighted the company’s financial losses and Elon Musk’s strong control, while emphasising its long-term growth strategy centred on expanding AI-driven capabilities and future technology investments.
9. Trump Signs Executive Order to Protect the US Financial System and Promote Fintech Innovation
10. Ebola Emergency: The World Health Organisation (WHO) has officially declared the spreading Ebola outbreak in the Democratic Republic of Congo and Uganda a “Public Health Emergency of International Concern.”
11. S. Regulatory Shifts Affecting Global Markets: The Trump administration is preparing an “innovation exemption” framework through the SEC to allow trading in tokenised or digital versions of public company stocks on decentralised crypto platforms, a move closely watched by digital asset traders throughout Asia.
12. Jane Street Expands in Singapore: Global proprietary trading firm Jane Street has doubled its office capacity in Singapore, highlighting the city-state’s continuing draw as a centralised hub for major financial institutions looking to scale up Asian operations.
13. Middle East Tensions: India expressed deep concern over a “dangerous escalation” following drone/missile strikes targeting the Barakah nuclear facility in the UAE, amidst the ongoing conflict with Iran.
14. WPI Inflation Concerns: Market reports indicate that Wholesale Price Index (WPI) inflation crossing the 10% mark is transitioning from a tail risk to a near-term base case scenario.

We now move into the final week of the May series with inevitable Monthly expiry intact within 2 days we continue to expect the possible breakout in the broader markets which has been lead by the “Nifty IT” with bottom formation & rise up almost 4.31% last week. This is just the beginning from one sector & it could now begin in Banking & financial sector as well with broader moves tend to positive, we expect a positive lead towards 24000 followed by 24600 & eventually 24900-25300 remains as a possibly inevitable move in the broader markets but these may take some more time almost of 2-3 weeks. However, on the downside 23000-23250 remains a crucial support level. This time the support could continue to come from Bank Nifty & IT Sector both.

Meanwhile Bank Nifty may now find its crucial support levels at 52700-53200 kind of levels & from those levels a meaningful upside can be seen towards 56700-57000 followed by 58000 kind of levels. The support may come from Private sector banks.

“Nifty IT” looks like has finally came near to support levels of 26000-27000 kind of levels to finally close this correction journey & from hereonwards as earlier anticipated so hit 30000 almost & it may continue to rise towards 33000 kind of levels very soon.

Sensex may now find its crucial support at 73000-74000 kind of levels while on the upside we may see a pull back towards 81000-82000 kind of levels.

Nifty Financials may find its crucial support levels now at lower levels of 24000-24500 kind of levels upside immediate target lies at 27000 kind of levels.

As of January 2026 the number of Demat Accounts has hit a whopping 21.6 crores this not only helps the capital markets directly but also directly to Equity investments.

The monthly SIP in Indian markets have now increased to an all-time high of Rs. 32,087 cr. per month as on March 2026.

 Brief Levels of Nifty / Sensex/ Bank Nifty / Nifty Financials / Nifty IT:

Nifty CMP:  23719.30
Nifty Potential Upside: 24000 / 24600 / 24900-25300 (As the case may be)
Nifty Immediate Crucial Support: 23000-23250

Sensex CMP: 75415.35
Sensex Potential Upside: 81000-82000
Sensex Immediate Crucial Support: 73000-74000

Bank Nifty CMP:  54055.35
Bank Nifty Immediate Upside: 56700-57000 / 58000
Bank Nifty Immediate Crucial Support: 52700-53200

Nifty Financial CMP: 25531.50
Nifty Financial Immediate Target: 27000
Nifty Financial Immediate Crucial Support: 24000-24500

Nifty IT CMP: 28912.50
Nifty IT Immediate Target: 30000 / 33000
Nifty IT Immediate Crucial Support: 26000-27000

Stock on Radar:

Large Caps:

• TCS (CMP 2317): As the IT sector & its giant came near to their respective long term support levels this large-cap IT has been on our radar since subdued levels of 2264 we still expect it to rise towards 2800 within 3 months’ time frame from CMP 2317 with SL placed at 1900.

• Patanjali (CMP 463): This counter looks like is going to have a move on full sclae from CMP 463 with strict SL placed at 430 one can expect an upside towards 520-540 in 3 months time frame.

• Havells (CMP 1201): This large-cap counter looks like is under over sold position with summer heating up this counter looks good to add here at CMP 1201 with strict SL placed at 1100 one can expect a upside towards 1400 in no time.

About the Author:
Mr Vishal Gupta a SEBI Registered Research Analyst is the founder of “VG STOCK RESEARCH”, founder of “THE ANALYSIS ROOM”, a writer & an advisor having rich experience in Indian Equity Markets who has spent years comprehending an industry wide shift and risk management with more than 14+ years exploring in depth analysis of the Equity & Derivatives.

He has also been into teaching Fundamental Analysis for quite some time giving investors/traders comprehensive knowledge & skills of Indian Equity Markets.

Email I’d: contact@vgstockresearch.com
Contact: +91-9953934544
Website: https://vgstockresearch.com/
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