Markets Set to Open Muted on May 26, 2026; Gift Nifty Down 0.44% as Fresh US Strikes on Iran Temper Peace Deal Optimism

Mumbai, May 26: Domestic equity markets are expected to open on a cautious note on Tuesday after Gift Nifty signalled a gap-down start, as fresh US military strikes on Iran overnight dampened the peace deal optimism that had driven Monday’s sharp rally, even as diplomatic talks continued in Doha and a new report pointed to a potential framework for reopening the Strait of Hormuz.

Gift Nifty futures were trading at 24,045.50, down 106.50 points or 0.44%, as of 07:53 IST on May 26, pointing to a subdued opening for the Sensex and Nifty 50 after Monday’s strong gains — with the index having surged over 1,000 points to close at 76,488.96 and the Nifty settling above the psychologically important 24,000 mark at 24,031.70.

Middle East Conflict

The mood shift was triggered by US Central Command conducting fresh strikes on Monday in southern Iran, targeting boats attempting to lay mines and missile launch sites in what Washington described as defensive actions, even as Iran’s top negotiator and foreign minister were simultaneously in Doha for talks with Qatar’s prime minister on a potential deal to end the three-month-old war. US Secretary of State Marco Rubio, speaking in New Delhi, said the US would give diplomacy every chance to succeed before considering dealing with Iran “in another way,” while President Donald Trump said talks were going “nicely” but warned of fresh attacks if they failed.

In a separate development adding complexity to the situation, Iran claimed it had downed a “hostile” stealth drone using a new air defence system, while Israeli Prime Minister Benjamin Netanyahu announced Israel would intensify strikes against Iran-backed Hezbollah in Lebanon. Adding a more constructive note, Nikkei reported citing a Middle East diplomatic source that both sides are discussing a plan to open the Strait of Hormuz approximately 30 days after a deal is reached, with Iran clearing mines during that window and a 60-day ceasefire extension to allow nuclear talks to proceed.

Asian Markets

Asian markets were mixed on Tuesday morning, with Hong Kong’s Hang Seng edging up 0.33% to 25,690.63 and Indonesia’s JSX Composite gaining 0.72% to 6,206.35, while Japan’s Nikkei 225 slipped 0.40% to 64,897.64 and Australia’s ASX All Ordinaries fell 0.55% to 8,866.00. Pakistan’s KSE 100 was a standout gainer, surging 2.31% to 1,71,725.29, while Shanghai’s Composite edged down 0.37% to 4,137.22.

US Markets

US markets ended Monday’s session — a shortened one ahead of the Memorial Day holiday — on a largely positive note, with the Dow Jones Industrial Average closing 0.58% higher at 50,579.70 and the S&P 500 gaining 0.37% to 7,473.47. The Nasdaq Composite added 0.19% to 26,343.97, while the S&P/TSX Composite led with a 1.04% advance to 34,830.89.

Oil Prices

Oil prices rose in early Asian trade on Tuesday as the fresh US strikes offset deal optimism, with Brent crude climbing more than 1% to $97.32 a barrel after Monday’s sharp selloff that had sent it below $100. WTI crude was up marginally from Monday’s last traded price but remained about 5.5% below Friday’s close, with no settlement recorded on Monday due to the US Memorial Day holiday.

Monday Session

Indian benchmark indices staged a powerful rally on Monday, with the Sensex soaring 1,074 points or 1.42% to close at 76,488.96 and the Nifty 50 advancing 312.40 points or 1.32% to settle at 24,031.70, reclaiming the 24,000 mark for the first time in recent sessions. The rally was broad-based, with 15 of 16 major sectoral indices ending in the green as oil marketing companies led the charge on the back of crude oil’s more than 5% plunge below the $100 mark. The sharp decline in oil prices offered meaningful relief to India as one of the world’s largest crude importers, easing concerns over inflation, fiscal pressures, and import costs heading into Tuesday’s session.

Source:

• nseindia.com