Gift Nifty Points to Flat-to-Positive Open as Fed Hawkishness, Weak US Markets Temper Iran Ceasefire Cheer

Mumbai, June 18: Indian equity markets are likely to open on a flat-to-positive note on Thursday, with Gift Nifty futures hinting at a modest uptick even as a set of sobering overnight cues from Wall Street and a hawkish tilt from the US Federal Reserve keep a lid on enthusiasm. While the formal signing of the US-Iran ceasefire agreement has removed some geopolitical premium from markets, the Fed’s signal that rate hikes — not cuts — may be on the table later this year has rattled global risk assets and tempered what could have been a more decisive rally on Dalal Street. Investors are likely to tread carefully through Thursday’s session, balancing the structural positive of a Hormuz reopening against the near-term headwind of tighter-for-longer US monetary policy. 

Gift Nifty futures were trading at 24,051.50, up 96.00 points or 0.40%, as of 7:59 am on Thursday, against Wednesday’s Nifty 50 session close of 24,085.70. The contract, expiring on 30 June 2026, points to a marginally positive open, though the gains are unlikely to be decisive given the drag from weak US markets and a mixed Asian session overnight. Traders will watch whether early momentum can be sustained or whether selling pressure surfaces as the session progresses. 

Iran Ceasefire: Signed, but Uncertainty Persists 

US President Donald Trump and Iranian President Masoud Pezeshkian digitally signed a 14-point memorandum of understanding on Wednesday, formally extending the April ceasefire by 60 days, committing Iran to restoring toll-free Strait of Hormuz passage within 30 days, lifting US sanctions on Iranian oil exports, and creating a $300 billion reconstruction fund — the first ever agreement signed by both a US and Iranian president since 1979. Even as G7 leaders welcomed the deal, Trump simultaneously warned he would “bomb the hell” out of Iran if it failed to honour the terms, while Israel refused to accept the accord and declined to withdraw from southern Lebanon. The deal reduces the most acute phase of the energy supply crisis, but its longer-term durability remains an open question that markets have not fully stopped pricing in. 

US Fed Reserve: Hold with a Hawkish Sting 

The Federal Reserve held its key interest rate unchanged at the conclusion of its Wednesday FOMC meeting, but the quarterly projections it released alongside the decision were far more aggressive than markets had expected. Nine of the Fed’s 18 policymakers signalled support for at least one rate hike in 2026 — a dramatic reversal from March, when not a single official had pencilled in a hike — with the committee citing inflation at its highest level in three years as the key driver of the shift. New chair Kevin Warsh’s influence was evident in the unusually brief post-meeting statement, which stripped out language that had previously pointed toward a future cut, effectively closing the door on near-term easing and leaving markets to absorb a materially less friendly policy outlook. 

Asian Markets: A Divided Picture on Thursday Morning 

Asian markets presented a mixed picture on Thursday, with the overnight US sell-off and the Fed’s hawkish pivot overshadowing the Iran ceasefire relief for most bourses in the region. The Nikkei 225 was the standout exception, rallying 1.62% to 71,036.61, aided by a weaker yen, while the Hang Seng slumped 1.45% to 23,960.08 and the Jakarta Composite fell 0.55%, reflecting the broader pressure on emerging markets from the prospect of higher US rates for longer. Australia’s All Ordinaries shed 0.41%, while the Shanghai Composite eked out a slim +0.12% gain, and Malaysia’s KLCI and Vietnam’s HNX 30 nudged marginally higher — a region divided between Iran-deal optimism and Fed-driven caution. 

US Markets: Broad Sell-Off on Wednesday 

Wall Street closed sharply lower across the board on Wednesday as the Fed’s unexpectedly hawkish quarterly projections wiped out any goodwill from the Iran ceasefire signing. The Dow Jones Industrial Average fell 507.12 points or 0.98% to 51,492.55, the S&P 500 dropped 1.21% to 7,420.10, and the Nasdaq Composite tumbled 1.34% to 26,021.66 as rate-sensitive technology stocks led the retreat. The NYSE Composite closed 0.99% lower at 23,469.76, with every major US index ending in negative territory — a uniformly weak close that has set a cautious tone for global markets heading into Thursday. 

Oil Prices: Declining on Iran Supply Expectations 

Crude oil prices continued to fall in early Thursday trading as energy markets priced in the anticipated return of Iranian supply following the ceasefire deal. Brent crude futures slipped 89 cents or 1.12% to $78.66 a barrel, while US West Texas Intermediate declined 98 cents or 1.28% to $75.81 a barrel as of 0005 GMT. The memorandum requires full restoration of Strait of Hormuz traffic within 30 days and the waiving of US sanctions on Iranian crude, with analysts warning that the sell-off could deepen further as the timeline for actual barrel flows becomes clearer. 

How Indian Markets Closed on Wednesday 

Indian equity benchmarks posted a fourth straight day of gains on Wednesday, with the Nifty 50 rising 96.55 points or 0.40% to close at 24,085.70 and the BSE Sensex advancing 347.14 points or 0.45% to settle at 77,155.62. The session was driven by easing oil prices, institutional buying in cyclical sectors, and pre-Fed positioning, with both indices holding firmly above the 24,000 and 77,000 marks respectively. Thursday’s open, however, is likely to be more measured, as the Fed’s hawkish surprise and a weak Wall Street close reset the immediate mood on Dalal Street. 

Source

• nseindia.com