Gift Nifty Points to Mildly Negative Open for Markets on Wednesday 

Mumbai, Aug 4: Gift Nifty futures slipped through Tuesday’s session, suggesting Nifty 50 and Sensex are likely to open mildly negative when Indian markets reopen at 9:15 am on Wednesday, August 5. Investors continued to track the Iran-US conflict and its impact on crude oil prices, after President Donald Trump accused Tehran of being duplicitous even as Iran said its separate talks with Oman on the Strait of Hormuz were progressing. Investors are also looking forward to the outcome of the two-day meeting of the Monetary Policy Committee of Reserve Bank of India which will be announced tomorrow. 

The near-month August 25 contract of Gift Nifty was trading at 24,529.00, down 63.50 points or 0.26 per cent on the day, while the far-month September 29 contract fell a steeper 111.50 points, or 0.45 per cent, to 24,622.00. The wider decline in the far-month contract points to persistent caution among traders over the near-term trajectory of the conflict in West Asia. 

Gift Nifty Intraday Chart 

It opened Tuesday’s session at 24,609, rallied to an intraday high of 24,695 in early trade, before sliding sharply through the late morning and afternoon to a low of 24,482.5. It was last seen trading near 24,546, clawing back some of its losses in the final hour as the sell-off eased. Support for Wednesday’s trade is placed at 24,482.5, while resistance is at 24,695. We expect Indian benchmark indices to open between these two levels, tracking Gift Nifty’s partial recovery from the day’s low. 

Developments on Iran-US Conflict 

The Strait of Hormuz remained closed for a fifth straight month, with shipping traffic through the waterway still running at a fraction of pre-war levels. Trump said he was losing faith in Iran’s leadership, calling them unbelievably duplicitous after Tehran denied that direct talks with Washington had resumed. Iran’s foreign ministry said it was in discussions with Oman, and not the US, over a temporary route to ease the passage of commercial vessels through the strait. Mediators from Qatar and Pakistan continued working to prevent a fresh escalation, fielding calls with officials from both Tehran and Washington, even as Gulf states remained on alert for a possible resumption of US strikes on Iranian targets. 

Crude Oil Prices 

Brent crude climbed to around 89.81 dollars a barrel on Tuesday, up more than 2 dollars from the previous session, as renewed uncertainty over the Iran talks revived the conflict’s risk premium. The gains came a day after Brent slid nearly 5 per cent to settle near 83.82 dollars a barrel, on hopes that fresh negotiations could pave the way for a reopening of the strait. OPEC+ producers have continued to raise output through the year, completing a planned restoration of earlier supply cuts, but the additional volumes have done little to offset the disruption to Gulf shipments, keeping prices volatile. 

Gains on Indian markets are likely to remain capped ahead of Wednesday’s open, with oil prices back on the rise and investors watchful of how the Iran-Oman talks progress. If all macro and geopolitical conditions remain the same through the remainder of Tuesday and into Wednesday’s pre-open session, our forecast of a mildly negative open for Indian equity benchmarks would hold true; a breakthrough in the Strait of Hormuz talks or a sharp reversal in crude prices, however, could quickly change the mood and push Gift Nifty back towards its intraday high. 

Present Nifty opening predictions are subject to change on the basis of news flow from Asian markets, fresh developments in the Iran-US crisis, or shifts in crude oil prices before Indian markets open at 9:15 am on Wednesday, August 5. 

Source

• nseix.com