Markets Set for Marginally Lower Start as Gift Nifty Signals Caution; Iran War, Oil Surge Weigh

Mumbai, July 23: Indian equity indices are likely to open marginally lower on Thursday as Gift Nifty hints at a soft opening. Asian markets traded largely directionless on Thursday morning. Wall Street also finished lower on Wednesday amid fresh cues that Washington and Tehran are on a collision course. Meanwhile, crude oil prices advanced to six-week highs on fresh escalation in Iran war. Overnight, US forces carried out strikes on Iran for the 12th straight night. Tehran-backed forces expanded their retaliation for oil tankers across vital shipping lanes in the Gulf and Red Sea. The escalating missile attacks between the US and Iran allied militias and fresh risks to global crude supplies are likely to keep investors on Dalal Street nervous at the start of trading session even as domestic investors are expected to latch on cues from the ongoing Q1FY27 earnings season to gauge demand and margin trend. 

Gift Nifty futures for July 28 expiry traded at 23,865.50, down 4 points or 0.02%, as of 7:48 am on Thursday. The weak reading indicated a flat to marginally weaker open for the Nifty 50, which closed at 23,996.25 in the last session. Gift Nifty’s near-flat move came despite choppy global cues amid escalation in Iran war tensions and rising crude oil prices. The slight weakness in the index indicated investors were cautious ahead of market open in domestic market. 

Oil Prices 

Oil prices jumped to a six-week high on Thursday as tensions between Washington and Tehran escalated further. Brent crude futures jumped more than 1.5% or $1.93 to trade at $96 per barrel, its highest since June 8 after settling 3% higher at $94.07 a barrel on Wednesday. US West Texas Intermediate crude rose $1.44 or 1.7% to $88.27, extending Wednesday’s near 3% surge.  

Iran War 

US military conducted airstrikes on Iran for the 12th straight night. US President Donald Trump warned Iran that Washington will destroy an Iranian bridge or power plant every time Tehran attacks a ship in the Strait of Hormuz. Iran-aligned Houthi militia in Yemen opened new front by threatening Saudi oil tankers transiting through Bab el-Mandeb Strait and announced naval blockade on Saudi Arabia, claiming that they had attacked two Saudi-flagged vessels including tanker Encelia. Iranian Revolutionary Guards said oil tanker at the Gulf skinned on fire after an explosion early Wednesday on what they described as mined route south of the Strait of Hormuz. The vessel along with two other tankers turned back, it added. 

Asian Markets on Thursday Morning 

Asian markets traded mixed on Thursday morning session. Japan’s Nikkei 225 advanced 0.43% to 66,402.94, Hong Kong’s Hang Seng Index climbed 0.56% to 25,031.99 and Australia’s S& P ASX All Ordinaries gained 0.63% to 9,061.80. China’s Shanghai Composite Index ticked up 0.04% to 3,868.45. Pakistan’s KSE 100 fell 0.97% to 174,429.93 and Malaysia’s FTSE Bursa Malaysia KLCI dropped 0.60% to 1,709.98. Vietnam’s HNX 30 index and Indonesia’s JSX Composite were also weaker. Thailand’s SET index traded largely flat in early deals. 

US Markets on Wednesday 

US markets ended mostly lower on Wednesday amid war developments between Washington and Tehran and investors continued weighing these developments against ongoing corporate earnings reports. Nasdaq Composite shed 0.57% to close at 25,690.90 and S&P 500 declined 0.14% to settle at 7,498.96. Dow Jones Industrial Average ended trade nearly flat, down just 0.01% at 52,218.58. The NYSE Composite bucked the broader-market weakness to add 0.12% and ended at 23,919.71. 

Iran war did not cool down as US military continued strikes on Iran for the 12th consecutive night. President Trump said the US will destroy either a power plant or a bridge in Iran whenever Tehran attacks a ship in Strait of Hormuz. Iran’s Revolutionary Guards claimed Strait of Hormuz will be closed to tankers unless Washington coordinates with Tehran beforehand. Iran-allied Houthi militia said they targeted two Saudi-flagged vessels including tanker Encelia as they threatened Saudi oil tankers passing through Bab el-Mandeb Strait and said they will impose naval blockade on Saudi Arabia. 

Indian Markets on Wednesday 

Indian benchmark indices closed lower on Wednesday tracking weak global cues. Sensex declined 715.06 points or 0.92% to end at 76,755.05 and Nifty 50 slipped 191.45 points or 0.79% to settle at 23,996.25. On the BSE, 2,616 stocks declined against 1,443 advances and 170 unchanged. Auto stocks and FMCG stocks provided some support to indices, restricting them from falling further. Brent crude breached $92 per barrel during trade, reigniting worries about inflation, rupee and corporate margins as India imports majority of its crude oil requirement.

Source

• nseindia.com