Gift Nifty Signals Weak Opening; Crude Rally And US-Iran Tensions Dominate Global Cues

Gift Nifty traded at a discount ahead of Thursday’s session, indicating a cautious start for Indian benchmark indices as investors assessed fresh developments in the U.S.-Iran conflict and their impact on global markets.

The derivatives indicator was trading near 23,198, about 42 points below the previous close of Nifty futures, pointing to a negative opening for domestic equities.

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Indian markets ended Wednesday’s session on a mixed note. The Sensex added 64.42 points to close at 73,983.18, while the Nifty 50 slipped 27.15 points to settle at 23,214.95 after giving up most of its intraday gains.

Asian Markets Under Pressure

Asian equities declined sharply on Thursday after renewed military action between the U.S. and Iran heightened concerns over energy supplies and inflation.

Japan’s Nikkei 225 fell 2.3%, while the broader Topix index declined 1.9%. South Korea’s Kospi dropped 4.1%, and the Kosdaq lost 2.8%. Hong Kong futures also indicated a lower start.

Wall Street Ends Deep In The Red

U.S. markets closed lower overnight as geopolitical uncertainty and weakness in technology shares weighed on sentiment. The Dow Jones Industrial Average fell 953.33 points, or 1.87%, to 49,918.78. The S&P 500 lost 119.66 points, or 1.62%, to close at 7,266.99, while the Nasdaq Composite dropped 509.32 points, or 1.98%, to 25,169.50.

Several large technology stocks ended lower. Nvidia declined 3.73%, AMD fell 4.86%, Broadcom lost 5.12%, Microsoft slipped 1.50%, while Tesla dropped 3.80%.

Fresh Escalation In U.S.-Iran Conflict

Global markets remained focused on developments in the Middle East after the U.S. launched additional strikes on Iran. Iranian media reported explosions in the country’s southern region near the Strait of Hormuz.

Iran also warned that vessels moving through the strategic shipping route could face retaliation. The Strait of Hormuz remains one of the world’s most important energy transit corridors, making any disruption a major concern for oil markets.

Crude Oil Extends Rally

Oil prices advanced further as fears of supply disruptions intensified. Brent crude futures climbed 2.47% to $95.40 per barrel, while U.S. West Texas Intermediate crude gained 2.89% to $92.63 per barrel. Higher crude oil prices are closely watched in India due to the country’s dependence on imported energy.

Inflation, Bonds And Commodities

U.S. consumer inflation accelerated to 4.2% in May, the highest annual increase since April 2023. The figures caused an increase in bond yields, including the U.S. Treasury 10-year yield that climbed to 4.548%.

Gold prices fell on fears of high interest rates, with spot gold at $4,063.87 and spot silver at $63.15 an ounce. The dollar index was also little changed at 100.01 as global investors adopted a wait-and-see approach to current geopolitical and economic developments.