Indian markets open in red as Brent crude nears $97 amid West Asia tensions, US rate concerns

NEW DELHI: Indian markets started the week in red as Brent crude reached fresh highs amid heightened geopolitical conflict in West Asia and concerns over US interest rates. The BSE Sensex stood at 76,408.05 points, shedding 107.38 points, or 0.14 per cent, while the NSE Nifty 50 traded at 23,883.15 points, down 14.55 points, or 0.06 per cent.

Anindya Banerjee, Head of Commodity and Currency Research at Kotak Securities, said, “Brent is trading near USD 96.50 this morning after a rise of about 10% last week, and the weekend has added a new dimension to the conflict — it is now being fought at sea”.

He added, “On Saturday, the US struck three Iranian oil tankers anchored off Iran’s coast, its first direct strikes on Iranian tankers, in response to Tehran firing ballistic missiles at American warships, including an aircraft carrier. Iran’s Revolutionary Guard then claimed attacks on three tankers using what it called an unauthorised route through the strait, along with US-affiliated vessels”.

At the time of reporting, Brent crude rose by USD 0.74 (+0.77%) to USD 97.02, and crude oil gained USD 0.79 (+0.86%) to stand at USD 92.27. In contrast, Gold experienced a downturn, sliding USD 30.63 (-0.69%) to USD 4,401.93.

Banerjee noted that on Sunday, Iran’s top security official said Tehran will declare a restricted zone in the coming days, beginning at the US naval blockade line and extending into the Gulf, with any ship entering it placed on Iran’s sanctions list, while also announcing that the transit corridor agreed with Oman will be signed shortly, with its entry and exit points under Iranian control.  “Separately, OPEC+ producers on Sunday held October output at September levels, so there are no incremental barrels coming from that quarter”, Banerjee said.

The surge in crude prices compounds pressure on domestic equities, with GIFT Nifty trading at 23,950.00 points, lower by 60.00 points, indicating persistent caution across morning trades.

Highlighting key support zones, Rajesh Palviya, Head of Research at Axis Direct said, “The near-term bias remains cautious, with the index struggling below the crucial 24,000–24,150 zone, which has repeatedly capped upside. Immediate support is placed at 23,800, followed by 23,700 and 23,600. A sustained moderation in geopolitical tensions that brings Brent below USD 90 could provide the trigger for the Nifty to reclaim 24,150.”

At the time of reporting, Dow Jones Futures dropped by 196.53 points (-0.37%) to trade at 53,217.72. The S&P 500 fell 29.11 points (-0.38%) to 7,718.60, while Nasdaq shed 77.07 points (-0.29%) to reach 26,506.99.

Vikram Kasat, Chief Business Officer – Advisory and Dealing at PL Capital, noted that, “Weak Wall Street cues, fear of rate hike in US and uncertainty in Middle East may lead to some more consolidation in the stocks when markets open for trade on Monday. For the next couple of weeks participants may watch out for SEBI’s review of CAS closing, FED meet outcome and developments in the Middle East.”

Kasat mentioned that the most desirable outcome of the said moniterables will be FED leaving the rates unchanged and “some kind of relief from the Middle East in terms of restart of peace talks.” (ANI)