Gift Nifty Points to Cautious Start on Thursday

Mumbai, Sept 16: Gift Nifty was hovering around 23,259 in early trade, down 8 points or 0.03%, pointing to a flat-to-slightly-weak opening for Indian equities on Thursday, even as the benchmark managed to hold above the psychologically important 23,200 mark. The near-month contract, expiring October 27, swung between an intraday low of 23,189 and a high of 23,340 through the session, a range that traders say reflects indecision rather than conviction in either direction. The contract opened at 23,212, dipped sharply around mid-morning before recovering, and has since drifted in a tight band, suggesting Dalal Street will likely open on a subdued note and take cues from global crude prices and the unfolding Iran conflict before committing to a trend. 

Oil Prices 

Oil prices eased modestly on Wednesday but stayed near multi-month highs, keeping energy costs firmly on investors’ radar.. Brent crude slipped 0.87% to $107.80 a barrel, while WTI crude fell 1.78% to $103.95. Murban crude, a key benchmark for Gulf supplies, bucked the trend and edged up 0.19% to $124.00, underscoring the premium being paid for oil that does not have to transit the Strait of Hormuz. Natural gas inched higher to $2.930, while gasoline slipped and heating oil edged up marginally. Elevated crude remains one of the biggest overhangs for a net oil-importing economy like India, since it threatens to widen the current account deficit, stoke inflation and squeeze corporate margins, particularly for aviation, paints and tyre companies. 

Iran War 

The war between the United States and Iran, now in its seventh month, continues to be the dominant driver of the volatility in energy markets. The Congressional Budget Office reported on Tuesday that the conflict has already cost $38 billion, a figure projected to climb by another $3 billion every month. The report attributed the bulk of the expense to the rapid depletion of American munitions stockpiles, which could take up to five years to replenish; Reuters has reported that the US used virtually all of its long-range precision missiles during the campaign. The CBO also estimated the war could push up US inflation by 0.5% in the first quarter of 2027. Separately, the House of Representatives voted for the third time to compel President Trump to end the war and withdraw troops, a measure that drew support from seven Republicans this time, up from four previously. Tensions have also spilled over into Saudi Arabia, where air defences intercepted a Houthi drone south of Mecca before it could enter the city’s protected airspace, the second such attempt since 2017. The Houthis have separately seized parts of Yemen’s Red Sea coast near the Bab el-Mandeb strait, threatening an alternate export route Saudi Arabia has been using to bypass the choked Strait of Hormuz. Shipping through Hormuz itself has slowed to a trickle, keeping freight and insurance costs elevated and adding to the uncertainty that has kept global risk sentiment fragile. 

Against this backdrop, Indian benchmarks staged a modest recovery on Wednesday, snapping a two-session losing streak. The Sensex climbed 332.63 points, or 0.45%, to close at 74,336.45, while the Nifty added 99 points, or 0.43%, to end at 23,217.60, reclaiming the 23,200 level after Tuesday’s slide to a five-month low.  

Gains were broad-based, with 12 of 16 sectoral indices ending in the green; the FMCG and PSU Bank indices each rose more than 1%, giving the benchmarks their biggest lift. SBI Life Insurance, HDFC Life, ITC, Axis Bank and State Bank of India were among the top Nifty gainers, with financial stocks also drawing support after new charges on select UPI transactions opened a fresh monetisation avenue for payment companies. Even so, the rebound was measured, with investors keeping one eye on crude near $108 a barrel and the other on the US Federal Reserve’s upcoming policy decision, both of which are likely to shape how far Thursday’s session can extend Wednesday’s gains.