Gift Nifty Signals Flat-to-Cautious Open for Indian Markets

Mumbai, May 21: Domestic equity markets are set to open on a flat-to-cautious note on Thursday, as Gift Nifty futures pointed to a muted start even as global sentiment found partial relief from US President Donald Trump’s indication that Washington was willing to wait a few days for the “right answer” from Iran before resuming military strikes.

Trump, speaking at Joint Base Andrews, described the situation as “right on the borderline” while stopping short of ordering immediate action a marginal de-escalation that steadied overnight markets but failed to spark a meaningful risk-on rally. Iran, however, warned that any renewed American aggression would trigger a regional war extending beyond the Middle East, keeping investors on edge.

Gift Nifty

Gift Nifty futures for the May 26, 2026 expiry were trading at 23,803.50 as of 7:55 am on May 21, down 50 points or 0.21% signalling that Indian markets are likely to open slightly lower but broadly flat relative to Wednesday’s closing levels of 23,659 on the Nifty 50. The modest negative gap suggests that while global risk appetite has stabilised after two sessions of sharp swings, the persisting uncertainty around the Iran peace deal and elevated crude prices are keeping institutional buyers cautious at the open. Traders will be watching closely for any fresh diplomatic signals out of Tehran or Washington through the morning, as any escalation or breakthrough could sharply alter the market’s opening trajectory.

Iran War Update

Talks between Washington and Tehran have shown little tangible progress six weeks after Trump paused Operation Epic Fury for a ceasefire, with Iran’s latest peace proposal demanding control of the Strait of Hormuz, compensation for war damage, lifting of sanctions and withdrawal of US troops largely repeating terms previously rejected by the US. Trump reiterated his determination to prevent Iran from acquiring a nuclear weapon, warning that the US was “all ready to go” if the right answers were not forthcoming.

In a significant escalatory move, Iran on Wednesday announced a new “Persian Gulf Strait Authority” and declared a “controlled maritime zone” in the Strait of Hormuz a step that entrenches its grip on the waterway that before the war carried roughly 20% of global oil and LNG shipments. Pakistan’s interior minister was in Tehran on Wednesday as a diplomatic conduit, with Washington and Tehran continuing to exchange messages through his mediation.

Asian Markets

Asian markets were broadly positive on Thursday morning, with the Nikkei 225 leading the regional recovery, surging 3.58% to 61,944.13 a sharp reversal from Wednesday’s losses driven by relief over Trump’s softer tone on Iran. The Hang Seng Index gained 0.46% to 25,769.79 and the Shanghai Composite advanced 0.89% to 4,199.10, reflecting improving sentiment across North Asian markets.

However, gains were not uniform, with the FTSE Bursa Malaysia KLCI slipping 0.61% to 1,716.80 and Indonesia’s JSX Composite falling 0.82% to 6,318.50, as Southeast Asian markets with higher oil import sensitivity remained under pressure. The KSE 100 in Pakistan rose 1.19% to 1,64,831.42, continuing its recent outperformance as the country’s diplomatic role in Iran peace mediation attracted investor interest.

US Markets

US equity futures were mildly lower in early Thursday trade after Wall Street closed on a mixed note on Wednesday, with the S&P 500 Mini futures slipping 0.13% to 7,442 and the NASDAQ 100 futures easing 0.12% to 29,354 for the June 18 expiry. The S&P Mid Cap 400 futures also slipped 0.07% to 3,642.30, suggesting that the broader market remains in a wait-and-watch mode ahead of further clarity on the Iran negotiations. Persistent concerns over elevated crude prices, rising global bond yields and the uncertain geopolitical outlook weighed on investor sentiment through Wednesday’s US session.

Oil Prices

Oil prices rebounded on Thursday after two sessions of sharp losses, with Brent crude rising 0.77% to $105.83 a barrel and US West Texas Intermediate advancing 0.99% to $99.23 as supply concerns resurfaced. Both benchmarks had dropped more than 5.6% on Wednesday after Trump suggested Iran talks were in their final stages, but the rebound reflects lingering doubts about whether a deal is truly imminent particularly after Iran announced the new Persian Gulf Strait Authority and entrenched its control over the Strait of Hormuz. A draw in US crude inventories added to the upward pressure on prices, raising concerns about the depletion of global stockpiles at a time when the Strait remains mostly closed to traffic.

Wednesday Closing Sensex and Nifty

Indian equity benchmarks staged a sharp recovery on Wednesday to end marginally higher, with the BSE Sensex rising 117.54 points or 0.16% to close at 75,318.39 and the NSE Nifty 50 gaining 41 points or 0.17% to settle at 23,659 reversing a deep morning loss driven by weak global cues. The rebound was led by strong buying in Reliance Industries, oil and gas, power, energy and auto stocks, with broader markets also outperforming as the Nifty Midcap 100 rose nearly 0.5% and smallcap shares traded with a positive bias. India VIX declined more than 1% by the close, signalling a meaningful easing of intraday volatility even as market breadth remained mixed with 2,008 advances against 1,920 declines on the NSE.

Source:

• nseindia.com