Markets Set for Muted Open as US-Iran Talks Yield No Breakthrough

Mumbai, May 22: Domestic equity markets are likely to open on a muted note on Friday, as investors weigh the lack of a decisive breakthrough in US-Iran peace negotiations against a broadly steady overnight performance on Wall Street.

Gift Nifty futures, trading at 23,656 down just 9.50 points or 0.04% point to a flat start for the Nifty 50, which closed at 23,654.70 on Thursday. With geopolitical uncertainty continuing to cloud risk appetite, traders are expected to tread cautiously in early trade even as global crude prices showed some signs of stabilisation overnight.

Middle East Conflict

The US and Iran remain deadlocked on two central issues Tehran’s stockpile of highly enriched uranium and control over the Strait of Hormuz keeping markets on edge. US Secretary of State Marco Rubio acknowledged “some good signs” in ongoing diplomatic talks but warned that any Iranian tolling system on the strait would be unacceptable. A senior Iranian source told Reuters that gaps between the two sides have narrowed, though no deal has been reached. Uranium enrichment rights and Hormuz access remain the principal sticking points blocking a resolution.

Asian & US markets

Asian markets presented a mixed picture on Friday morning. Japan’s Nikkei 225 led regional gains, surging 2.29% to 63,094.61, while Hong Kong’s Hang Seng advanced 0.43% to 25,496. Australia’s ASX All Ordinaries also edged higher by 0.57% to 8,890.90. On the downside, Indonesia’s Jakarta Composite fell sharply by 3.54% to 6,094.94, while Malaysia’s KLCI slipped 0.22%.

US markets ended Thursday on a steady footing, with the Dow Jones Industrial Average gaining 0.55% to close at 50,285.66. The Nasdaq Composite added a modest 0.09% to settle at 26,293.10, while the S&P 500 edged up 0.17% to 7,445.72. The NYSE Composite also closed higher, rising 0.46% to 23,127.69.

Oil Prices

Oil prices clawed back on Friday after declining sharply the previous session, with Brent crude futures rising $2.38 or 2.3% to $104.96 a barrel. US West Texas Intermediate futures gained $1.73 or 1.8% to trade at $98.08. Both benchmarks had shed roughly 2% on Thursday, hitting their lowest closing levels in nearly two weeks, as doubts over a US-Iran deal weighed on sentiment.

Thursday’s Closing

Indian benchmark indices ended virtually unchanged on Thursday after a choppy session, with the Sensex falling 135.03 points or 0.18% to close at 75,183.36 and the Nifty 50 slipping just 4.30 points or 0.02% to 23,654.70. Market breadth remained firmly positive, with 2,307 shares advancing against 1,688 declines, signalling underlying buying interest despite the muted headline performance. Realty and healthcare stocks led sectoral gains, while IT and FMCG shares emerged as the biggest drags on the indices.

Source:

• nseindia.com