Markets Set For Muted Open As Gift Nifty Slips, Iran War Drags On

Mumbai, Sept 4: Indian markets are headed for a muted start on Friday, with Gift Nifty signalling a flat-to-lower open even as global cues turned mixed overnight. The pre-market indicator pointed to caution on Dalal Street after Thursday’s losses, with traders weighing the Iran conflict against a firmer Wall Street close. 

US Vice President JD Vance on Thursday declined to call the fighting between Washington and Tehran a war, and offered no timeline for its end, even as the two sides traded fresh attacks this week after a lull, as the conflict enters its seventh month. 

Oil prices held near recent highs on Friday, with the renewed exchange of fire in the Middle East keeping a floor under crude even as Vance touted US efforts to keep the Strait of Hormuz open. Elevated energy costs have weighed on Indian sentiment this week. 

That drag was offset only partly by a strong overnight session on Wall Street and a broadly positive Asian open, as easing bets on a Fed rate hike lifted risk appetite globally, though Gift Nifty suggests that optimism may not carry into Indian trade. 

Gift Nifty Signals Cautious Start 

Gift Nifty’s September futures contract was trading at 24,026.00 as of 8:34 am IST on Friday, down 42 points, or 0.17 per cent, pointing to a subdued opening for the Nifty at 9:15 am. The pre-market weakness comes despite a firm close on Wall Street overnight, suggesting Indian traders remain more focused on the Iran conflict and elevated crude prices than the risk-on mood elsewhere. If the indication holds, the Nifty would open little changed from Thursday’s close of 23,873.45, extending its losing run to a fourth session. 

Iran War Drags On With No End In Sight 

Vance said on Thursday he would not characterise the fighting between the US and Iran as a war and declined to give a timeline for its end, as the conflict entered its seventh month with no diplomatic talks underway. “I wouldn’t call it a war,” Vance said, arguing Washington had ended major combat operations even as fighting flared again this week. He said any resolution would hinge on Iran halting attacks on commercial shipping in the Strait of Hormuz, adding he did not know when that might happen. The renewed hostilities follow US airstrikes on Iranian targets on Tuesday, pushing oil prices to their highest levels since July. 

Oil Prices Stay Elevated 

Oil prices edged higher on Friday, holding near recent highs after this week’s flare-up in the Iran conflict kept supply concerns in focus. WTI crude rose 0.66 per cent to $91.90 a barrel, while Brent crude added 0.39 per cent to $95.89, with the OPEC basket price up a sharper 3.12 per cent at $98.29. Murban crude bucked the trend, slipping 1.30 per cent to $104.72. 

Asian Markets Higher On Friday Morning 

Most Asian markets advanced Friday morning as investors scaled back bets on a near-term Fed rate hike after dovish comments from Governor Christopher Waller. Hong Kong’s Hang Seng led the region, jumping 2.07 per cent, while Japan’s Nikkei 225 rose 0.86 per cent and China’s Shanghai Composite gained 0.67 per cent. Malaysia’s KLCI, Indonesia’s Jakarta Composite, Thailand’s SET and Pakistan’s KSE 100 also traded higher, tracking a weaker dollar and stronger yen. Australia’s All Ordinaries and Vietnam’s HNX 30 lagged, slipping 0.05 per cent and 1.39 per cent respectively. 

Wall Street Ends Sharply Higher 

US stocks rallied on Thursday after Waller’s remarks and comments from New York Fed President John Williams fuelled hopes the central bank would hold rates steady, pulling the 10-year Treasury yield down to around 4.75 per cent. The Dow surged 624.16 points, or 1.18 per cent, to 53,686.11, while the Nasdaq jumped 1.4 per cent to 26,584.06 and the S&P 500 climbed 1.06 per cent to 7,747.71. Technology stocks led the advance, with chipmakers and Snowflake posting strong gains. 

Sensex, Nifty Ended Lower On Thursday 

Back home, the Sensex and Nifty ended lower on Thursday after a volatile session, with selling in IT, FMCG, auto and pharma stocks offsetting gains in realty and banking shares. The Sensex fell 417.49 points, or 0.55 per cent, to 76,152.86, while the Nifty declined 41 points, or 0.17 per cent, to 23,873.45. Both indices opened firm and the Sensex rose more than 350 points, with the Nifty briefly reclaiming 24,000, before selling built through the session amid elevated crude, geopolitical tensions and rate uncertainty. Thursday’s decline extended the losing streak to three sessions through Wednesday, as investors assessed the Iran conflict’s impact on oil supplies and inflation. 

Source

•  nseindia.com
• oilprice.com