Asian Rally, Softer Oil and Upbeat US Futures Signal Firm Start for Dalal Street 

Mumbai, May 25: Asian markets rallied sharply on Monday, while US stock futures advanced and oil prices slipped, setting the stage for a firm start for Indian equities as investors cheered signs of progress in US-Iran peace negotiations and easing concerns around the Strait of Hormuz.

Japan led gains in the region, with the Nikkei surging 3% to scale fresh record highs. Hong Kong and South Korea remained shut for holidays, leading to thinner trading volumes across Asia. MSCI’s broadest index of Asia-Pacific shares outside Japan rose over 1%.

The broader risk-on mood was driven by hopes that tensions in the Middle East may cool after US President Donald Trump said a memorandum of understanding to reopen the Strait of Hormuz had been “largely negotiated.”

Falling Crude Offers Relief for India

The optimism triggered a sharp fall in crude oil prices, with Brent crude dropping more than 4% to below the psychologically crucial $100-a-barrel mark. The decline in oil is particularly supportive for India, a major crude importer, as it eases concerns around inflation, fiscal pressures and imported costs.

Lower crude prices could benefit sectors such as oil marketing companies, aviation, paints, tyres and other fuel-intensive industries, while also improving sentiment around the broader macroeconomic outlook.

GIFT Nifty Points to Positive Opening

GIFT Nifty futures indicated a positive opening for domestic benchmarks, pointing to gains over Friday’s close of 23,719 on the Nifty 50. GIFT Nifty was hovering around the 23,912 mark, suggesting a strong start for Dalal Street.

US Futures Gain Despite Wall Street Holiday

US futures also reflected improving sentiment even though Wall Street remains shut on Monday for the Memorial Day holiday. Nasdaq futures climbed about 1.3%, while S&P 500 futures gained around 0.8%, extending Friday’s momentum when US equities ended higher on hopes of de-escalation in the Middle East and resilient corporate earnings.

Friday’s regular US trading session had seen investors returning to risk assets despite lingering worries over inflation and elevated Treasury yields. The Dow Jones hit an intraday record high, while technology shares continued to find support from the artificial intelligence theme and expectations of strong earnings momentum.

Source:

• Exchanges