Gift Nifty Points to Strong Open for Sensex and Nifty as US and Iran Hold Attacks Over Weekend

Mumbai, July 27: Indian equity benchmarks look set to open sharply higher on Monday tracking strength in Gift Nifty futures as sentiment improved after both the United States and Iran refrained from launching further attacks over the weekend, boosting expectations that the Middle East conflict may have found its diplomatic off-ramp. The war in Iran entered its second week on Monday. 

Gift Nifty 

Gift Nifty futures for July 28 expiry were trading at 23,974.00 at 8:14 am IST on Monday, up 209.50 points, or 0.88 per cent over its previous close. The climb suggests a firm opening for the Nifty 50, which ended Friday’s session at 23,767.45, with domestic benchmarks likely to open well above the psychologically key 23,900 to 24,000 region. The overnight rise in Gift Nifty is powered by the pause in hostilities between Washington and Tehran over the weekend and a sharp decline in crude oil prices. Both factors have boosted risk appetite ahead of the opening bell. 

Iran War 

Iran said on Sunday it would stop attacking US forces in Iraq as long as Washington did not resume its campaign of air strikes. It came after the Pentagon paused its bombing campaign on Saturday evening after 13 nights of strikes into Iraq and Syria. Iranian forces have also stopped firing rockets at US troops, Reuters reported citing an Iranian official. The halt came after a Friday meeting in which US military and political advisers raised the issue of dwindling American stockpiles of missiles with President Donald Trump. Joint Chiefs Chairman General Dan Caine was among those at the meeting, US officials said. “The president has given diplomacy a chance,” US Ambassador to the UN Mike Waltz said on Twitter on Sunday. Iranian officials said the pause in attacks by the United States would not necessarily mean an end to escalation by Washington. Some residents of Tehran told Reuters it felt like a “waiting game”. 

Asian Markets on Monday Morning 

Asian markets were trading mixed on Monday morning as investors weighed the significance of the US-Iran pause. Japan’s Nikkei 225 was up 0.24 per cent at 64,764.01, Hong Kong’s Hang Seng gained 0.96 per cent to 25,201.69 and Australia’s All Ordinaries advanced 1.03 per cent to 9,034.00. Shanghai’s Composite edged up 0.61 per cent. Malaysia’s KLCI fell 0.43 per cent, Indonesia’s Jakarta Composite dropped 1.88 per cent, Pakistan’s KSE 100 declined 0.42 per cent and Vietnam’s HNX 30 slumped 1.43 per cent. Thailand’s SET index was nearly flat on the day. 

US Markets, Friday Close 

Wall Street finished broadly stronger on Friday with the Dow Jones Industrial Average climbing 0.46 per cent to 51,947.25 and the S&P 500 edging up 0.05 per cent to close at 7,411.98. The NYSE Composite rose 0.49 per cent to 23,990.88, Mexico’s S&P/BMV IPC ticked up 0.18 per cent and Canada’s S&P/TSX Composite advanced 0.50 per cent. The Nasdaq Composite bucked the trend, dipping 0.64 per cent to finish at 24,975.82 as traders took profits in tech giants. The broadly firmer close on Friday came even before the US and Iran announced a pause in strikes on Saturday evening. Markets had already begun leaning into hopes for Middle East de-escalation. 

Oil Prices 

Oil prices plunged around 5 per cent on Monday after Iran and the United States both decided not to fire over the weekend, raising expectations that tanker traffic would be able to move more freely through the Strait of Hormuz after repeated Iranian threats against shipping. Brent crude futures were down $4.89, or 5.05 per cent, at $91.89 a barrel, dipping below the key $90 level earlier in the session. US West Texas Intermediate crude was down $4.67, or 5.23 per cent, at $84.64 a barrel. Both benchmarks fell to their lowest levels in close to a week after surging for three consecutive weeks as tensions escalated. Brent had reached $100 a barrel as fighting intensified between Iran and the United States that disrupted tanker traffic through the Strait of Hormuz last week. On Friday, Brent had settled at $96.78. It also spilled into the Red Sea where tanker attacks have reportedly targeted shipments from Saudi Arabia through Bab el-Mandeb strait towards Asia. 

Friday Close: Sensex And Nifty 

Indian equity benchmarks ended lower on Friday, recording their fifth consecutive session of decline as rising crude oil prices amid the Iran war and selling in stocks listed on exchanges dragged investor sentiment lower. The Sensex fell 331.62 points or 0.43 per cent to settle at 76,059.77, while the Nifty 50 shed 102.15 points or 0.43 per cent to close at 23,767.45, slipping below 23,800. Auto, metal and energy stocks witnessed selling interest while buying was visible in IT and media stocks with the Nifty IT index rising 0.8 per cent and the Nifty Media index surging 1.8 per cent. Market breadth remained mixed with around 2,050 stocks advancing and 1,961 declining on NSE. The Nifty Auto index was the top loser slumping 1.10 per cent. 

Source

• nseindia.com