Pre-open Points to Positive Start for Sensex, Nifty as Iran Talks Inspire Investors

Mumbai, June 22: Indian shares traded higher at pre-open signalling a positive start for benchmark indices as Iranian negotiators indicated that talks with the US had progressed and oil prices eased. 

Nifty 50 rose 0.2% at pre-open while the Sensex increased 0.5% even as Gift Nifty traded at 24,120.50, which is higher than Nifty 50’s previous close of 24,013.10.  

Domestic benchmarks Nifty 50 and Sensex climbed last week, buoyed by lower crude prices. The rally lost momentum on Friday, with both indexes ending lower as a weak demand outlook from Accenture triggered selling in IT stocks.  

Spotlight will be falling on conglomerate Reliance Industries which outlined its strategic priorities and growth roadmap at its annual general meeting on Friday. 

Spotlight will also be falling on Aurobindo Pharma, Bharat Forge and Kirloskar Oil Engines. Aurobindo Pharma’s U.S. subsidiary has received approval from the U.S. Federal Trade Commission to acquire Lannett Company in a deal valued at $250 million. Bharat Forge has signed a Rs 425 crore contract with the Ministry of Defence for the supply of gas turbine generators to the Indian Navy. Kirloskar Oil Engines has secured a major order from HyperNext to supply infrastructure solutions for large data centre. 

As for global cues, Asian equities traded higher on Monday after signs of progress emerged in peace talks between Washington and Tehran, easing fears of a prolonged disruption to global energy supplies. Japan’s Nikkei surged nearly 2%, while South Korea’s benchmark index gained about 1%, supported by strength in technology and semiconductor stocks. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8%. 

Investor sentiment improved after Iranian negotiators indicated that discussions with the United States had advanced and that a broader framework agreement could potentially be reached within 60 days. The comments helped calm markets that had been rattled for weeks by escalating Middle East tensions and concerns over shipping disruptions through the Strait of Hormuz, a critical route for global crude exports. 

Crude prices continued to command investor attention. Brent crude hovered around $81 a barrel earlier in the session after a volatile start to the week, as traders assessed the durability of the U.S.-Iran talks and reports of ongoing disruptions around the Strait of Hormuz. However, optimism surrounding a diplomatic resolution later trimmed gains, with Brent easing back to around $79 a barrel at the time of writing. 

The direction of crude prices will remain crucial for Indian equities. Sustained oil prices above the $80-per-barrel mark could pressure oil marketing companies, airlines and other sectors exposed to rising input costs, while upstream energy producers may benefit from stronger realizations. Market participants are therefore expected to closely monitor both developments in the Gulf and further updates on the negotiations. 

While Wall Street is yet to commence trading, U.S. equity futures signalled a softer start. S&P 500 futures were down 0.4%, while Nasdaq futures fell 0.5%, reflecting investor caution despite the easing geopolitical backdrop. 

Markets continue to grapple with the prospect of tighter monetary policy after Federal Reserve officials reiterated concerns about persistent inflation, prompting traders to price in the possibility of another rate increase later this year. Treasury yields have remained near multi-month highs, lending support to the U.S. dollar and tempering risk appetite. 

Source

• Exchanges