Indian benchmark indices slip over oil prices

Indian stock markets have been trailing with negative sentiments on Friday, oil marketing stocks being the catalyst for the fall. World’s top rating agency, Moody’s raised its Crude Oil price forecasts in a range of US$45 to 65 per barrel. These forecasts are on the back of rising demand which resulted in declining inventories across the globe. The demand also counterbalanced rising US shale production. 

With this, the biggest losers in the benchmark indices which led the downfall are the oil marketing majors. IOC, BPCL and Hindpetro tumbled 3.2 per cent, 3 per cent and 2.4 per cent, respectively, dragging the Nifty50 index 0.8 per cent down. The three companies which together hold 16 per cent weightage in the Nifty Energy Index have also dragged the index to trade with 1.7 per cent losses. Even the heavy weight explorers like Reliance and ONGC which form 60 per cent of the index, are down with 1 per cent and more losses.

After hitting all-time high near 14,663 levels on October 27, 2017, the index formed a Symmetric Triangle pattern on the daily time frame. The index attempted to hit all-time high level again but retreated from 14,660 levels on January 23, 2018. The index witnessed a triangle pattern breakdown at 13,970 levels on February 2 and fell up to 13,332 levels. The index gave a bounce back but has been trading range bound since then and resisting at 50 per cent retracement (13,996) of the prior sharp downward rally. 

Recently, the index hit lower top at 13,955 and has tumbled for three consecutive days, the third one being on Friday. Oscillators and volumes support the slide. We may see some more downside in the index going forward.