Asian Markets Advance, US Futures Fall, Signalling Cautious Start for Dalal Street As Oil, Iran Talks in Focus

Mumbai, June 22: Indian benchmark indices are set for a cautious opening on Monday despite fresh signs of progress in U.S.-Iran peace negotiations and easing concerns over a prolonged disruption to energy supplies. 

Asian equities advanced broadly, with Japan’s Nikkei rising nearly 2% and South Korea’s benchmark index climbing 1%, led by technology and semiconductor stocks. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.8%, reflecting improved investor sentiment after Iranian negotiators said talks with the United States had made progress and a broader framework agreement could be reached within 60 days. 

The improvement in sentiment comes after weeks of volatility driven by tensions in the Middle East and concerns over shipping disruptions through the Strait of Hormuz, a key artery for global crude exports. While geopolitical risks remain elevated, investors welcomed indications that diplomatic channels remain open between Washington and Tehran. 

Oil Keeps Traders on Edge 

Crude oil remained a key market driver. Brent crude traded around the $81 per barrel mark after a volatile start to the week. Prices initially jumped as uncertainty lingered over the durability of peace talks and reports of continued disruptions around the Strait of Hormuz. However, gains moderated as hopes of a negotiated settlement tempered fears of a major supply shock. As of writing, Brent was down at $79 per barrel. 

For Indian markets, oil’s trajectory will remain critical. Elevated crude prices above $80 a barrel could weigh on oil marketing companies, aviation stocks and sectors sensitive to input costs, while energy producers may benefit from higher realizations. Investors will therefore continue to monitor developments in the Gulf alongside diplomatic updates from the U.S.-Iran talks. 

Wall Street Futures Fall 

While U.S. cash markets are yet to open, S&P 500 Futures were down 0.4% while Nasdaq futures declined 0.5%, as investors balanced easing geopolitical concerns against the U.S. Federal Reserve’s hawkish stance. Markets are increasingly pricing in the possibility of another U.S. rate hike later this year after policymakers signalled inflation risks remain elevated. Treasury yields have stayed near multi-month highs, lending support to the dollar. 

What It Means for India 

The combination of stronger Asian equities, falling U.S. futures and hopes of progress in Middle East diplomacy suggests Indian equities could begin the week on a cautious note. Traders are likely to remain cautious as fluctuations in crude oil prices and headlines from U.S.-Iran negotiations continue to dictate global risk sentiment. 

Source

• Exchanges