Cautious Start Seen for Dalal Street As Asian Markets Rise; US Futures Signal Fragility

Mumbai, April 20: Asian markets traded with a cautiously positive bias on Monday, even as geopolitical tensions in the Middle East kept investors on edge, setting up a mixed but watchful start for Indian equities.

Equity benchmarks across the region edged higher in early trade, tracking optimism from last week’s rally on Wall Street, where risk appetite had been buoyed by strong tech-led gains and expectations of supportive policy cues. However, that optimism is now being tested. Fresh developments over the weekend surrounding renewed tensions between the US and Iran have injected a layer of uncertainty into global markets, particularly via volatility in crude oil prices.

Oil Prices Climb

Oil prices climbed after reports of disruptions around the Strait of Hormuz, a critical artery for global energy supplies, raising concerns about inflation and supply shocks. This has tempered gains in Asian equities, with investors balancing last week’s bullish momentum against the risk of fresh volatility.

Crucially, US markets have not yet opened for the new week, but futures are pointing to a weak start. Dow futures were down 0.9%, while S&P 500 and Nasdaq futures also slipped, reflecting nervousness after the geopolitical flare-up. This comes after a strong Friday session, where US equities had scaled fresh highs, giving Asian markets a positive initial cue before sentiment turned more cautious.

European markets, too, are yet to begin trading for the day, leaving Asia to react first to the evolving macro narrative. The absence of live cues from Europe and the US cash market means Indian equities will largely take direction from a combination of Asian trends, commodity prices, and US futures.

For Indian markets, the setup suggests a tentative start. Early gains cannot be ruled out given the positive undertone in parts of Asia and the strength seen on Wall Street at the end of last week. However, oil prices remain a key overhang, especially for an import-heavy economy like India. Strength in crude could weigh on sectors sensitive to input costs and inflation expectations, potentially capping upside.

At the same time, the dip in US futures signals that global risk sentiment is fragile, and any further escalation in geopolitical tensions could quickly shift markets into risk-off mode.

In essence, the opening tone for Dalal Street is likely to be mildly positive but volatile, with traders expected to remain cautious, tracking crude oil movements and developments in the US-Iran situation for clearer directional cues.

Source:

• Exchanges