Markets Set for Flat-to-Weak Open as Trump Revives Iran Strike Threat

Mumbai, May 20: Domestic equity markets are headed for a cautious, flat-to-marginally negative open on Wednesday as renewed geopoliticala anxiety gripped global sentiment overnight after US President Donald Trump walked back Monday’s optimism, declaring on Tuesday that the US may need to strike Iran again and that he had been just an hour away from ordering an attack before pulling back.

The sharp reversal in tone from signalling a “very good chance” of a nuclear deal on Monday to threatening fresh strikes within days if no agreement was reached rattled investors who had rotated aggressively into risk assets on Tuesday, and the mood heading into Wednesday’s session on Dalal Street is decidedly more guarded.

Gift Nifty futures pointed squarely to that cautious open. The 26-May-2026 contract was trading at 23,426.50 as of 8:03 am on Wednesday, down 88.50 points or 0.38% from its previous close, signalling that the NSE Nifty 50 is likely to open below the 23,500 mark and test the resolve of buyers who had held the index near Tuesday’s close of 23,618.

Middle East Conflict

The Iran situation deteriorated sharply in tone through Tuesday. Trump told reporters at the White House that he had been an hour away from ordering a strike on Iran before postponing it, adding that Iran’s leaders were “begging for a deal” but that a fresh U.S. attack would follow within days if no agreement materialised. In a significant parallel development, the U.S. Senate advanced a war-powers resolution by a 50-47 vote that would end the Iran war unless Trump obtains Congressional authorisation a rare bipartisan rebuke of the president, with four Republicans crossing the aisle to vote with Democrats. However, the resolution faces steep hurdles, needing to clear the Republican-led House and secure two-thirds majorities in both chambers to survive an expected presidential veto.

Asian Markets

Asian markets on Wednesday morning reflected the renewed risk aversion comprehensively, with virtually every major index in the red. Japan’s Nikkei 225 dropped 1.30%, Indonesia’s Jakarta Composite slumped 3.46%, Hong Kong’s Hang Seng fell 0.54%, Vietnam’s HNX 30 lost 1.83%, Australia’s S&P ASX All Ordinaries declined 1.12%, and China’s Shanghai Composite eased 0.42%, with only Pakistan’s KSE 100 bucking the trend with a 0.67% gain.

Wall Street on Tuesday

Wall Street ended Tuesday sharply lower as Trump’s renewed Iran strike comments unsettled markets that had been hoping for de-escalation. The Dow Jones Industrial Average fell 322.24 points or 0.65% to 49,363.88, the Nasdaq Composite dropped 220.02 points or 0.84% to 25,870.71, and the S&P 500 declined 49.44 points or 0.67% to 7,353.61.

Oil Prices

Oil prices eased modestly on Wednesday, with Brent crude futures slipping 45 cents or 0.4% to $110.83 a barrel and WTI futures down 27 cents or 0.3% to $103.88, as Trump’s assertion that the war would end “very quickly” provided a thin cushion against the broader uncertainty over whether Washington and Tehran can find common ground.

Indian Markets on Tuesday

Back home, Indian markets had ended Tuesday on a weak note despite an IT-driven attempt at recovery. The BSE Sensex declined 114.19 points or 0.15% to close at 75,200.85, while the NSE Nifty 50 fell 31.95 points or 0.14% to settle at 23,618.00, as private banking weakness and profit-booking in heavyweights overwhelmed the technology sector’s strong showing.

Source:

• nseindia.com