Dalal Street to Open Marginally Lower as Iran Deadlock Persists, Asian Indices Fall, Oil Surges

Mumbai, April 28: Indian equity markets are bracing for a negative open on Tuesday after signs of a deadlock in peace talks between Iran and the US along with weaker Asian markets weighed on sentiment.

Markets may see a marginal dip after extending gains on Monday on hopes that Iran offered a new plan to de-escalate the conflict. Iran offered to put its nuclear program on hold until the conflict ends and disputes over shipping routes in the Gulf are resolved. US President Donald Trump spoke to his national security team about Iran’s offer Monday but a US official said Trump was unhappy with the offer and tensions remained on a stalemate.

Gift Nifty was trading at 24,072.50 for the May 26 expiry, down 102.50 or 0.42% as on 07: 46 am on Tuesday, signalling a weak start for the Nifty 50 and Sensex with markets expected to open down around 100 points. The weakness undoes much of Monday’s gain. With most Asian markets pointing lower Tuesday morning, any hopes of a rebound in Indian markets are met with a doubt.

Iran Tensions

A deal to end rising tensions between Iran and the US hit a roadblock Monday after Trump spoke with his national security team about Tehran’s latest offer to deescalate tensions. Secretary of State Marco Rubio accused Iran of attempting to “buy some time”, saying Trump had rejected Iran’s offer during his call with top advisors. Rubio went on to say that America will not allow Tehran to “get away with it” and that any deal would have to “definitely prevent them from sprinting towards a nuclear weapon at any point”. Iran has rejected allowing America to monitor its nuclear sites as a condition of ending hostilities. With the Strait of Hormuz likely to remain shut for exports for some time, and both sides showing no signs of backing down on the nuclear issue, tensions are likely to remain elevated.

Asian Markets 

Asian markets were broadly negative during their respective morning sessions on Tuesday. Japan’s Nikkei shed 0.48% to 60,246. Hong Kong’s Hang Seng was down 0.30% and Australia’s All Ordinaries fell 0.46%. Thailand’s SET Index bucked the broader Asian downtrend to rally 1.58% while Shanghai Composite was down a marginal 0.03%. Markets may resume their negative open when Indian markets open on Tuesday.

US Markets 

Wall Street finished mixed on Monday as investors weighed higher oil prices and tensions between Iran and the US against expectations of strong quarterly earnings. The Dow Jones fell 0.13% to close at 49,167. The NYSE Composite index declined 0.13% to finish Monday’s session at 18,249. Nasdaq gained 0.20% to close Monday at 24,887 and the S&P 500 rose 0.12%, closing at 7,173.

Oil Prices

Oil prices extended their gains on Tuesday as efforts to end the ‌US-Iran war appear stalled, with the crucial Strait of Hormuz waterway still mainly shut, keeping energy supplies from the key Middle East producing region out of the reach of global buyers. Brent crude futures for June climbed 45 cents, or 0.4%, to $108.68 a barrel as of 0051 GMT, after gaining 2.8% in the previous session to its highest close since April 7. The contract is up for a seventh day. U.S. West Texas Intermediate (WTI) crude for June rose ‌58 ⁠cents, or 0.6%, to $96.96, after gaining 2.1% in the previous session.

Source:

• nseindia.com