Dalal Street is poised to start the day on a weak footing due to losses in Asian markets and heightened global uncertainty following recent remarks by US President Donald Trump regarding the Iran conflict.
Early indications point towards a soft opening, with GIFT Nifty futures trading at 22,359 at 7:41 am, signaling a gap-down start for the Nifty 50, which had concluded at 22,679.40 in the prior session.
Asian markets experienced a decline of around 1.2% after Trump hinted at the nearing completion of the US’s “core strategic objectives” in the Iran conflict without specifying a resolution timeline, leading to investor caution.
Trump’s statement about the US planning to strike Iran aggressively in the next two to three weeks has raised concerns about further escalations, adding pressure on global markets.
Geopolitical tensions drove crude oil prices up in early trading, with Brent crude at $105.91, up 4.70%, and WTI crude at $103.88, up 3.76%, at 8:10 am.
The surge in crude oil prices could negatively impact India by raising import costs and potentially affecting inflation, influencing market sentiment throughout the day.
Foreign institutional investors (FIIs) were significant sellers in the previous session, offloading equities worth Rs 8,331.15 crore in the cash market. Selling was observed across various derivatives.
In contrast, domestic institutional investors (DIIs) provided support by purchasing equities worth Rs 7,171.80 crore in the cash market and engaging in buying FII stock futures amounting to Rs 3,199.31 crore.
During the last trading session, Indian markets closed with substantial gains, with the Nifty 50 rising by 348 points and the Sensex by 1,186.77 points, reflecting global optimism amid hopes of reduced tensions in the Iran conflict.
Garima Kapoor, Deputy Head of Research and Economist at Elara Capital, noted that while Trump’s comments suggest a potential resolution to the conflict, short-term risks remain high, with uncertainty prevailing in the near future.
Kapoor highlighted the shift in US focus away from regime change and the Strait of Hormuz, indicating a potential easing of energy supply concerns once tensions de-escalate.
Market volatility is likely to persist, influenced by global cues, crude oil movements, and updates on the Iran situation, with early trade expected to face pressure from ongoing uncertainty and rising oil prices.