Gift Nifty Signals Muted Open for Sensex, Nifty on Monday

Mumbai, October 26: Indian markets are set for a muted opening on Monday, with Gift Nifty futures trading almost level with the Nifty’s Friday close. The indices ended a fourth straight session lower, and sentiment remains weighed down by the Iran war, Brent crude near USD 115 and a weaker start in Asia. 

The near-month October 27 Gift Nifty contract was trading at 22,599.50, up 34.50 points or 0.15 per cent from its previous close of 22,565.00, as of 7:36 am IST on Monday. Against the Nifty 50’s Friday close of 22,600.00, the contract is at a discount of 0.50 points, which points to a flat start for the benchmarks. 

The Nifty 50 closed Friday after trading between 22,372.00 and 22,787.25, a range of more than 400 points, and India VIX rose 6.32 per cent to 16.76. The Nifty Smallcap 100 fell 2.94 per cent and the Nifty Midcap 100 fell 2.21 per cent. 

Iran War 

US Director of National Intelligence Jay Clayton warned in a memo dated October 23, seen by Reuters, that Iran has substantially increased efforts to target US personnel, with lethal plots against American citizens reaching advanced stages in the Middle East and certain other countries. The alert came after Washington scaled back staffing at its mission in Saudi Arabia in response to intensified attacks by Iran-allied Houthi forces, and the US State Department updated travel advisories for more than a dozen regional countries on Saturday, citing the Houthi threat. Those attacks have coincided with a rise in attacks on commercial shipping in the Strait of Hormuz, and sources told Reuters earlier this month that Iran was preparing a more forceful response if the United States resumes large-scale military attacks on its territory. The war is a week away from entering its ninth month and has weighed significantly on US President Donald Trump’s approval ratings ahead of midterm elections on November 3. 

Asian Stocks 

Asian stocks were mostly lower on Monday morning, with China’s Shenzhen index falling 1.48 per cent, or 172.21 points, to 11,501.61 and the Shanghai Composite losing 0.39 per cent to 3,676.02. South Korea’s Kospi slipped 0.97 per cent, or 54.04 points, to 5,496.26, while Japan’s Nikkei 225 fell 0.30 per cent, or 188.15 points, to 62,505.01. Malaysia’s benchmark dropped 0.34 per cent to 1,606.11 and Singapore’s Straits Times eased 0.19 per cent to 5,411.93. Hong Kong’s Hang Seng rose 0.29 per cent, or 65.83 points, to 23,159.20 and Australia’s ASX 200 edged up 0.03 per cent to 8,798.10. 

US Markets 

Wall Street ended lower on Friday, with the Dow Jones Industrial Average down 1.23 per cent, or 652.82 points, at 52,215.16, the S&P 500 down 0.52 per cent at 7,623.68 and the Nasdaq Composite down 0.21 per cent at 25,955.34. The NYSE Composite fell 0.65 per cent to 24,117.27, the Russell 2000 lost 0.29 per cent to 2,775.90, and the transport and utility indices declined 1.24 per cent and 0.63 per cent, while the Nasdaq 100 was flat at 28,957.53. The VIX volatility index rose 2.21 per cent to 19.45. 

Oil Prices 

Oil prices eased on Monday, with Brent crude down USD 1.84, or 1.58 per cent, at USD 114.88 per barrel and West Texas Intermediate (WTI) down USD 1.93, or 1.87 per cent, at USD 101.34. Murban crude bucked the trend, rising USD 3.61, or 3.16 per cent, to USD 118.00, while gasoline and heating oil fell 0.95 per cent and 1.30 per cent. Even after dipping, Brent is trading well above USD 110, and costlier crude raises the risk of imported inflation and a wider import bill for India, which depends heavily on oil imports. 

Friday’s Close 

Indian equity benchmarks ended lower for a fourth consecutive session on Friday, snapping a two-week winning streak. The Sensex fell 125.56 points, or 0.17 per cent, to 73,123.83, and the Nifty 50 lost 87.65 points, or 0.39 per cent, to 22,600.00. The benchmarks opened higher after three losing sessions but failed to hold the gains as surging crude and Middle East tension heightened concerns over inflation and corporate profitability, leaving the Nifty and Sensex down 2.4 per cent and 2.2 per cent over the week. Liquidity was absorbed by strong demand for Jio Platforms‘ USD 3.2 billion IPO, which was subscribed 13.8 times by 3:30 pm, while all sectoral indices ended lower.  

Sources

• Gift Nifty
• NSE data