Indian Markets Set for Cautious but Positive Open; Gift Nifty Signals Marginal Gap-Up

Mumbai, April 22: Indian equity markets likely to open on a strong footing on Wednesday as suggested by Gift Nifty with Asian markets mixed and global cues mildly positive. Investors are watching for any new developments out of the Middle East after Trump announced a surprise extension to ceasefire against Iran overnight, creating fresh optimism around tensions.

Gift Nifty futures for April 28 contract was trading at 24,428, up 70.50 points or 0.29% at 8:54 am on April 22. Based on this reading markets will open marginally in green Wednesday, in-line with a flat-to-marginally positive open. Bulls aren’t getting too excited but they aren’t bending in defeat either. Overnight oil prices saw Brent surge above $100 a barrel amid the geopolitical tensions between US and Iran. Nifty 50 had settled close to the 24,600 level Tuesday so the GIFT Nifty reading suggests that Indian markets open broadly in-line with Tuesday’s close with a mildly positive tilt to the open. Here are some things to watch Wednesday.

Middle East Conflict

The Iran ceasefire situation took another dramatic turn overnight, keeping investors firmly on edge. President Trump announced on social media that he would indefinitely extend the ceasefire with Iran to allow for further peace talks, saying the US had agreed to a Pakistani mediators’ request to hold off any military action until Iran’s leaders present a unified proposal. However, the credibility of the extension was immediately challenged by Iran-linked media — Tasnim News Agency, affiliated with the Islamic Revolutionary Guards Corps, said Iran had not requested any ceasefire extension and repeated threats to break the US naval blockade by force. Adding to the confusion, an adviser to Iran’s lead negotiator dismissed Trump’s announcement as carrying little weight and potentially being a ploy. The situation was further complicated when US Vice President JD Vance reportedly called off his trip to Islamabad for peace talks, briefly sending oil prices surging above $100 a barrel before Trump’s ceasefire extension statement caused a partial reversal.

Asian Markets

Asian markets were mixed overnight. Japan’s Nikkei was the only major Index in the green closing 0.51% higher at 59,653. Shanghai gained marginally by 0.04%, while the Hong Kong’s Hang Seng Index shed 1.44% to 26,104. Australia’s All Ordinaries fell 0.86% and Vietnam’s VN Index sank 1.71%. Asian markets are mixed as Dalal Street prepares to open.

Oil Prices

Oil traders went on a roller coaster ride overnight with oil prices jumping as high as $100 a barrel briefly. The dramatic overnight move captured everything that’s wrong about the current geopolitical environment between Iran and US allies. President Donald Trump announced overnight that the US will extend the current ceasefire with Iran and expects Iranian leaders to participate in peace talks going forward. Brent crude pared some gains after Trump’s announcement and was last up 4.4% at $99.67 a barrel in post-settlement trade. West Texas Intermediate crude settled up 2.8% at $92.13 a barrel.

Context: Iran is India’s third-biggest supplier of crude after Iraq and Saudi Arabia. Oil trading above $100 a barrel will be a huge negative for India’s macroeconomic stability. It would widen the current account deficit and add to inflationary pressures.

Tuesday Closing 

Indian markets signed off on Tuesday on a strong note. Indian equity markets ended firmly higher yesterday, extending gains for a third straight session, with benchmarks supported by broad-based buying and strong earnings-driven moves across sectors. The Sensex surged around 750 points to 79,273, while the Nifty 50 closed above the 24,550 mark, up around 210 points, reflecting improving risk appetite amid easing global concerns and upbeat corporate results.

Source:

• nseindia.com