Gift Nifty Indicates Slightly Negative Opening for Indian Markets

Mumbai, Aug 17: Indian equity indices are likely to open marginally lower on Monday as Gift Nifty trades in the red before the domestic session. Weaker Asian markets, elevated geopolitical tension in the Middle East and a tepid close on Wall Street ended Friday failed to enthuse investors, which is setting up subdued start for India markets on Monday.  

Iran tensions continue to cap risk appetite as US President Donald Trump engaged in what appears to be a prolonged campaign targeted at containing Iran’s nuclear programme. Trump has called on allies around the world to support his Iran agenda and directly pressed South Korea last week to contribute to Washington’s efforts, but Seoul refused.  

India imports the majority of its oil needs, and elevated crude prices weigh on its current account, weaken the rupee and corrode corporate profitability. Indian markets have largely priced in the crude-price impact over the last few weeks but escalating tensions between Washington and Tehran remain front-and-centre.  

Gift Nifty 

The futures contract for the Gift Nifty Aug-25-26 contract was trading at 24,401.00 as at 8:11 am IST on Monday, August 17, down 20.50 points or 0.08%. This points to a slightly negative opening for the Nifty 50 when trading resumes, which matches overnight weakness in US markets and the lack of clear direction among Asian indices. Today’s Asia Wrap  

Asian Markets on Monday Morning 

Asian markets traded mixed on Monday as uncertainty around Middle East tensions kept a lid on risk appetite. Hong Kong’s Hang Seng was Asia’s best-performing market, rising 1.58%, while Indonesia’s JSX Composite (+1.59%) was close behind. Shanghai Composite (+0.44%) and Japan’s Nikkei 225 (+0.07%) lagged but stayed positive, while Vietnam’s HNX30 (-1.37%), Malaysia’s KLCI (-0.38%), Thailand’s SET (-0.33%), Australia’s All Ordinaries (-0.18%) and Pakistan’s KSE 100 (-0.11%) finished in negative territory.  

US Markets on Friday 

US Markets closed mostly lower on Friday, with Dow Jones Industrial Average (-0.20%) and the Nasdaq Composite (-0.28%) leading declines among major indices. The S&P 500 (-0.17%) also settled in the red while the NYSE Composite (+0.05%) bucked the trend. Canada’s S&P/TSX Composite and Mexico’s S&P/BMV IPC also ended Friday’s session lower. Bloomberg India FINANCIALMARKETS WITH NEAR-TERM TRADING VIEWPOINTS  

US-Iran War Timeline  

Sunday’s positive Asian lead fizzled quickly amid increased uncertainty over the weekend as Trump doubled-down on his demands for South Korea to contribute to US-led effort targeting Iran. Oil prices traded higher as Trump announced Washington would suspend Ulchi Freedom Shield joint military exercises with Seoul over disagreements with Iran.  

Trump has been angered by Seoul’s refusal to support Washington’s Iran campaign after asking directly last week, but has so far refrained from levying costs against South Korea over its refusal. North Korea has routinely lambasted the joint military exercises between South Korea and the US as rehearsals for invasion – Pyongyang will no doubt welcome Trump’s unilateral decision to suspend drills despite Seoul’s objections. Trump has suspended similar drills between US and South Korea before – after his meeting with Kim Jong Un in Vietnam in 2018 he also called off military exercises citing cost – but Iran has regularly been invoked by North Korea as reason why it should retain its nuclear deterrent.  

Oil Prices  

WTI Crude traded higher on Monday morning, advancing 0.23% to $82.59 per barrel. Brent Crude was stronger, adding 0.50% to $88.96 per barrel. Murban Crude fell 0.77% to $89.42 a barrel, while Natural Gas plummeted 2.63% to $2.661 per million BTUs. US crude prices have trended higher for the week as tension in the Middle East continues to escalate. On Friday Trump announced that he would end joint military exercises with South Korea over their refusal to contribute troops to contain Iran’s nuclear programme, and vowed “we won’t be paying a big price for that”.  

Sources

• nseindia.com