India equities fall as rupee breaches 96, crude spikes
Indian stocks declined as a surging US dollar and rising crude oil prices threatened to delay a corporate earnings recovery.
Indian equities face renewed selling pressure as escalating tensions in West Asia drive crude oil prices higher. This has compounded a macroeconomic squeeze that saw the rupee breach the 96-per-dollar threshold.
The currency's depreciation to that level directly threatens corporate profit margins by raising the cost of imported energy and raw materials. This imported inflation arrives as Indian markets were already pricing in a fragile recovery in corporate earnings. If energy supply disruptions persist, the timeline for that earnings rebound could be pushed back significantly.
Global liquidity dynamics will also play a crucial role in the near term. Investors are closely awaiting upcoming remarks from the US Federal Reserve Chair. These comments are expected to set the tone for global interest rate expectations.
Any signal of prolonged higher rates could accelerate capital outflows from emerging markets. This would further stress the rupee and dampen equity valuations. Against this uncertain backdrop, technical analysts are identifying selective opportunities where momentum is overriding broader market weakness.
The green energy transition theme is showing particular resilience. Adani Green Energy is trading above its 20, 50, 100 and 200-day exponential moving averages. This strong bullish structure has yielded fresh swing highs accompanied by improving volumes.
Virat Jagad, senior technical research analyst at Bonanza Portfolio, recommends buying Adani Green at Rs 1,605 with a stop-loss of Rs 1,500 and a target of Rs 1,700 to Rs 1,800. Adani Power is exhibiting a similar bullish reversal after breaking a short-term falling trendline, with its relative strength index recovering above 53. Jagad recommends a buy at Rs 226 with a stop-loss of Rs 214, targeting Rs 235 to Rs 245.
Industrial and technology names are also attracting interest from investors. Azad Engineering has decisively broken out from a year-long consolidation pattern. Himanshu Gupta, head of retail broking research at Jainam, recommends buying at Rs 2,380 with a stop-loss of Rs 2,245.
Gupta set a target range of Rs 2,515 to Rs 2,650 for Azad Engineering. MosChip Technologies, with a recommended buy price of Rs 240.5, is reversing a multi-month corrective phase. The stock has crossed key Fibonacci retracement levels with a sequence of higher highs and higher lows to target Rs 255 to Rs 270.
