Sensex, Nifty set for bloodbath? US-Iran flare-up, oil at $76 may rattle Dalal Street
Sensex and Nifty are headed for a weak start after the US-Iran flare-up shook global markets and lifted crude prices. GIFT Nifty was trading at 24,246 around 8 am, down 164 points.
Benchmark indices Sensex and Nifty are set for a weak start on Wednesday as fresh tensions between the United States and Iran rattled global markets, pushed crude oil prices above $76 a barrel and dented investor sentiment worldwide.
GIFT Nifty was trading at 24,246 around 8 am, down 164 points, indicating a gap-down opening for the benchmark indices.
The expected decline comes after the Sensex erased nearly 600 points from its intraday high on Tuesday before ending lower, snapping a four-session winning streak as investors booked profits after the recent rally.
Global sentiment deteriorated overnight after the US military launched airstrikes against Iran and reimposed sanctions on Iranian crude sales. The action followed attacks on commercial vessels in the Strait of Hormuz, reviving fears of supply disruptions through one of the world's busiest oil shipping routes.
The escalation pushed Brent crude above $76 a barrel, extending gains from the previous session after oil had already surged around 3% on Tuesday.
Wall Street ended lower overnight, while Asian markets traded cautiously on Wednesday morning as investors turned risk-averse amid growing geopolitical uncertainty.
For India, higher crude oil prices remain a key concern as the country imports more than 85% of its crude oil requirement. Rising oil prices can increase the import bill, fuel inflation, put pressure on corporate margins and weigh on economic growth.
Hitesh Tailor, Research Analyst at Choice Equity Broking Private Limited, said the weak opening is largely being driven by global cues.
"Indian equity markets are expected to open on a weak note, with Gift Nifty trading at 24,246, down by 164 points, indicating a gap-down start for the benchmark indices. Global cues remain mixed as Asia-Pacific markets traded cautiously, while U.S. futures remained largely flat amid persistent geopolitical concerns and uncertainty surrounding the Federal Reserve's policy outlook," he said.
Despite the weak opening, Tailor believes the broader trend for Indian markets remains positive.
"The domestic market's broader technical structure remains constructive, supported by strong underlying trends and subdued volatility," he added.
The Nifty 50 fell 0.13% on Tuesday after witnessing profit booking in the second half of the session, ending its four-day winning streak.
According to Tailor, the market has now entered a consolidation phase ahead of the start of the June quarter earnings season.
"The Nifty has entered a phase of consolidation as traders await the commencement of the quarterly earnings season. While short-term momentum has moderated, the broader trend remains positive as the index continues to trade above all major moving averages except the 200-day EMA," he said.
He expects the 24,300-24,200 zone to act as immediate support, while 24,000 remains a crucial level for maintaining the ongoing uptrend. On the upside, 24,500-24,600 remains a key resistance zone, with a decisive breakout needed to trigger the next leg of the rally.
Apart from geopolitical developments, technology stocks are also expected to remain in focus after Reuters reported that Chinese AI startup DeepSeek is developing its own AI chip, potentially reducing dependence on global chipmakers. Investors will also closely watch Tata Consultancy Services' June-quarter earnings, due on Thursday, which will unofficially kick off the earnings season.
On the institutional front, foreign institutional investors (FIIs) bought Indian equities worth Rs 393.19 crore on Tuesday, while domestic institutional investors (DIIs) sold shares worth Rs 383.43 crore.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
Benchmark indices Sensex and Nifty are set for a weak start on Wednesday as fresh tensions between the United States and Iran rattled global markets, pushed crude oil prices above $76 a barrel and dented investor sentiment worldwide.
GIFT Nifty was trading at 24,246 around 8 am, down 164 points, indicating a gap-down opening for the benchmark indices.
The expected decline comes after the Sensex erased nearly 600 points from its intraday high on Tuesday before ending lower, snapping a four-session winning streak as investors booked profits after the recent rally.
Global sentiment deteriorated overnight after the US military launched airstrikes against Iran and reimposed sanctions on Iranian crude sales. The action followed attacks on commercial vessels in the Strait of Hormuz, reviving fears of supply disruptions through one of the world's busiest oil shipping routes.
The escalation pushed Brent crude above $76 a barrel, extending gains from the previous session after oil had already surged around 3% on Tuesday.
Wall Street ended lower overnight, while Asian markets traded cautiously on Wednesday morning as investors turned risk-averse amid growing geopolitical uncertainty.
For India, higher crude oil prices remain a key concern as the country imports more than 85% of its crude oil requirement. Rising oil prices can increase the import bill, fuel inflation, put pressure on corporate margins and weigh on economic growth.
Hitesh Tailor, Research Analyst at Choice Equity Broking Private Limited, said the weak opening is largely being driven by global cues.
"Indian equity markets are expected to open on a weak note, with Gift Nifty trading at 24,246, down by 164 points, indicating a gap-down start for the benchmark indices. Global cues remain mixed as Asia-Pacific markets traded cautiously, while U.S. futures remained largely flat amid persistent geopolitical concerns and uncertainty surrounding the Federal Reserve's policy outlook," he said.
Despite the weak opening, Tailor believes the broader trend for Indian markets remains positive.
"The domestic market's broader technical structure remains constructive, supported by strong underlying trends and subdued volatility," he added.
The Nifty 50 fell 0.13% on Tuesday after witnessing profit booking in the second half of the session, ending its four-day winning streak.
According to Tailor, the market has now entered a consolidation phase ahead of the start of the June quarter earnings season.
"The Nifty has entered a phase of consolidation as traders await the commencement of the quarterly earnings season. While short-term momentum has moderated, the broader trend remains positive as the index continues to trade above all major moving averages except the 200-day EMA," he said.
He expects the 24,300-24,200 zone to act as immediate support, while 24,000 remains a crucial level for maintaining the ongoing uptrend. On the upside, 24,500-24,600 remains a key resistance zone, with a decisive breakout needed to trigger the next leg of the rally.
Apart from geopolitical developments, technology stocks are also expected to remain in focus after Reuters reported that Chinese AI startup DeepSeek is developing its own AI chip, potentially reducing dependence on global chipmakers. Investors will also closely watch Tata Consultancy Services' June-quarter earnings, due on Thursday, which will unofficially kick off the earnings season.
On the institutional front, foreign institutional investors (FIIs) bought Indian equities worth Rs 393.19 crore on Tuesday, while domestic institutional investors (DIIs) sold shares worth Rs 383.43 crore.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
