Gift Nifty Points to Muted-to-Negative Open as Iran, US Clash, Weak Global Cues Weigh

Mumbai, Aug 31: Indian equity benchmarks look set for a muted-to-negative start on Monday, with Gift Nifty signalling a soft open even after Friday’s IT-led rally. Weak cues from Asian and US markets, alongside a fresh flare-up between the United States and Iran over the weekend, are weighing on sentiment ahead of the 9:15 am bell. 

Asian markets fell broadly on Monday morning, tracking a sharp overnight sell-off on Wall Street on Friday. The Nikkei led losses, sliding more than 1.5 per cent, while Hong Kong’s Hang Seng shed around 1 per cent, reflecting risk-off positioning across the region. 

US benchmarks ended lower on Friday, with the Nasdaq and S&P 500 both retreating as investors turned cautious into the weekend. The pullback came even after a strong AI-driven rally earlier in the week, underscoring how quickly sentiment can turn on fresh geopolitical risk. 

Adding to the caution, US forces struck two rocket launchers on Iran’s Larak Island on Sunday, the first known American strikes on Iran since late July, prompting Tehran to retaliate with a missile attack on US bases in Jordan. The exchange has revived fears over shipping disruptions in the Strait of Hormuz, a route critical to global energy supplies, just as Gift Nifty opened lower for the new week. Adding to the pressure, US Treasury Secretary Scott Bessent said fresh secondary sanctions targeting banks with Iranian links would likely be rolled out weekly, alongside the renewed military action. 

Gift Nifty Figures 

The Gift Nifty contract expiring September 29 was last at 24,216.00, down 59.50 points, or 0.25 per cent, from a previous close of 24,275.50, as of 8:05 am IST on Monday. Even so, the level sits modestly above Friday’s Nifty 50 cash close of 24,175.65, suggesting the index could open little changed to slightly higher in cash terms, even as the intraday move on the derivatives contract points to a soft, cautious start. The pullback since its previous close reflects the market’s initial reaction to the weekend’s Iran-US escalation, with traders likely to watch for further headlines through the morning. 

Iran War 

The weekend clash marked the first known US military strikes on Iran since late July, coming after weeks in which Washington had shifted toward economic sanctions over direct military action. Iran retaliated with ballistic missiles aimed at two US bases in Jordan, most of which were intercepted, according to reports. US Central Command said the strikes targeted Iranian minelaying forces that posed an imminent threat in the Strait of Hormuz, while Tehran vowed further retaliation. The renewed hostilities have again raised concerns over shipping through the strait, which carried nearly a fifth of global crude oil and LNG shipments before the six-month-old conflict began. 

Asian Markets 

Asian markets were broadly weaker on Monday morning as the Iran-US flare-up added to an already cautious mood from Friday’s Wall Street losses. Japan’s Nikkei 225 tumbled over 1,000 points, or 1.57 per cent, to 65,361.60, the region’s worst performer. Hong Kong’s Hang Seng dropped 1 per cent to 25,329.57, while Malaysia’s KLCI and Thailand’s SET also declined. Only Pakistan’s KSE 100 and Vietnam’s HNX 30 managed modest gains against the broader regional weakness. 

US Markets 

Wall Street closed lower on Friday, with the Nasdaq Composite down 0.52 per cent at 26,402.42 and the S&P 500 slipping 0.25 per cent to 7,711.76. The Dow Jones Industrial Average was little changed, down a marginal 0.02 per cent at 53,559.99. The NYSE Composite fell 0.26 per cent, while Canada’s S&P/TSX Composite dropped 0.76 per cent, reflecting broad-based caution across North American markets. The declines came even after a strong AI-fuelled rally earlier in the week, highlighting how quickly risk appetite faded. 

Oil Prices 

Oil prices jumped as the Iran-US exchange of fire stoked fresh concerns over supply disruptions through the Strait of Hormuz. WTI crude rose 2.48 per cent to $85.47 a barrel, while Brent crude gained 2.77 per cent to $90.54. Murban crude climbed the most, up 4.04 per cent to $95.75, reflecting its closer linkage to Gulf supply routes. With visible tanker traffic through the strait reportedly down to just five vessels a day over the weekend, further upside in crude prices cannot be ruled out if tensions escalate. 

How Sensex, Nifty Ended Friday 

Indian benchmarks snapped a two-session losing streak on Friday, with the Nifty 50 rising 0.3 per cent to settle above 24,100 at 24,175.65 and the Sensex advancing 0.4 per cent, or around 330 points, to 77,264.51. The rally was powered by a 3.5 per cent surge in the Nifty IT index, which tracked a strong overnight rally in US technology shares after Nvidia’s upbeat outlook lifted global AI sentiment. TCS, Tech Mahindra, Infosys, Wipro and HCLTech led the gains, even as Asian Paints, SBI Life, ITC, ICICI Bank and UltraTech Cement featured among the top losers. The Nifty Midcap and Smallcap indices ended little changed, showing the rally stayed concentrated in large-cap technology names rather than broadening out. 

Source

• nseindia.com
• OilPrice.com,