Markets Set to Open Higher; Gift Nifty Up 1%

Mumbai, May 25: Domestic equity markets are poised to open on a positive note on Monday, with Gift Nifty signalling a firm start as global risk sentiment improved on the back of weekend diplomatic developments between the United States and Iran, even as fresh caution from President Donald Trump kept traders on guard.

Gift Nifty futures were trading at 23,960.00, up 239 points or 1.01%, as of 7:49 am on May 26, pointing to a gap-up opening for benchmark indices Nifty 50 and Sensex when domestic markets resume after the weekend.

Middle East Conflict 

The initial burst of optimism was fuelled by Trump’s statement on Saturday that Washington and Tehran had “largely negotiated” a memorandum of understanding on a peace deal that would reopen the Strait of Hormuz — the critical chokepoint that, before the conflict erupted in February, channelled one-fifth of global oil and liquefied natural gas shipments. However, Trump tempered expectations sharply on Sunday, saying he had instructed his representatives not to rush into any deal with Iran, and that the U.S. blockade on Iranian ships in the Strait of Hormuz would “remain in full force and effect until an agreement is reached, certified, and signed.” 

The two sides remain deadlocked on core issues, including Iran’s nuclear ambitions, sanctions relief, and tens of billions of dollars in frozen Iranian oil revenues. Iran’s Fars news agency also pushed back, calling Trump’s assertion that a deal was nearly final “inconsistent with reality.”

Adding to the positive backdrop for Indian markets was Trump’s warm remarks toward India, delivered during a phone appearance at an event in Delhi attended by U.S. Secretary of State Marco Rubio. “We have never been closer to India. And India can count on me 100 per cent and our country. If they have any help, they know where to call,” Trump said, also describing Prime Minister Narendra Modi as a personal friend and expressing admiration for the bilateral relationship.

Asian & US Markets

Asian markets were broadly higher on Monday morning, led by a sharp 2.85% surge in Japan’s Nikkei 225 to 65,142.81 and a 1.10% gain in Indonesia’s JSX Composite to 6,162.05. Hong Kong’s Hang Seng rose 0.86% to 25,606.03, while China’s Shanghai Composite added 0.62% to 4,138.30. Malaysia’s KLCI and Pakistan’s KSE 100 were the exceptions, slipping 0.05% and 0.40% respectively. US markets ended Friday’s session on a positive note, with the Dow Jones Industrial Average gaining 0.58% to close at 50,579.70 and the S&P 500 rising 0.37% to 7,473.47. The Nasdaq Composite edged up 0.19% to 26,343.97, while the NYSE Composite advanced 0.42% to 23,225.75.

Oil Prices

Oil prices slipped to two-week lows on Monday as hopes of a U.S.-Iran peace deal weighed on crude, with Brent falling 4.55% to $98.83 a barrel and WTI dropping 4.73% to $92.03. Both contracts touched their lowest levels since May 7, though supply constraints from the Strait of Hormuz blockade continued to limit deeper declines.

Friday Closing

Indian benchmark indices closed higher on Friday after a volatile session, with the Nifty 50 ending 0.27% higher at 23,719.30 and the Sensex advancing 0.31% to 75,415.35. Private banks and select earnings-driven stocks led the recovery, while RBI’s aggressive currency intervention helped stabilise the rupee and lift broader sentiment. Easing fears over sharp rupee depreciation and a modest pullback in crude from above $100 a barrel further supported risk appetite heading into the weekend.

Source:

• nseindia.com