Nifty, Sensex open lower amid rising US-Iran tensions, outlook cautious as oil prices climb

MUMBAI: Indian equity markets opened under pressure on Friday, with benchmark indices Nifty 50 and BSE Sensex declining amid rising geopolitical tensions between the US and Iran, higher crude oil prices, and cautious investor sentiment. The Nifty 50 index opened at 25,406.55, down -47.80 points or (-0.19 per cent), while the BSE Sensex also opened lower at 82,272.49, down -225.65 points or -0.27 per cent.

Market experts attributed the weakness to global uncertainty and rising geopolitical risks. Ajay Bagga, a banking and market expert, said, “Risk-off sentiment dominates due to Geopolitical tensions (Iran). Fragile investor confidence after US market weakness. Macro backdrop US cycle cooling but resilient. Eurozone stabilizing. China still facing property stress but showing managed stabilization as Lunar year holiday spending will give a clue next week on the strength of the Chinese consumer”.

He added, “Iran escalation risk high, Supreme Leader Khamenei rejected US demands to halt uranium enrichment. Trump has warned Tehran of ‘traumatic consequences’ if no deal within a month. US military buildup in the region raises risk of weekend escalation. Arab allies not keen on risking Iranian retaliation”.

Rising crude oil prices also weighed on investor sentiment. Brent crude prices crossed the USD 70 mark and are currently trading at USD 71.82 per barrel amid tensions between the US and Iran. Precious metals remained firm, reflecting cautious sentiment. Gold prices held strong at Rs 1,55,277 per 10 gram for 24 karat, while silver prices rose by 1.14 per cent to Rs 2,44,113 per kg.

Broad market indices also witnessed declines on the NSE. The Nifty 100 was down by 0.18 per cent, the Nifty Smallcap 100 declined by 0.15 per cent, and the Nifty Midcap index fell by 0.24 per cent.

VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said, “The sharp spike in Brent crude to USD 72 reflects growing fear and uncertainty in markets. The continuing weakness in IT stocks is another dampener for the market. Amidst the many crises, the strength of the Indian economy and the recovery in corporate earnings as reflected in Q3 numbers, are positives for the market. If, hopefully, the US-Iran standoff gets resolved in the coming days, the market will bounce back. Therefore, investors may wait and watch the unfolding developments in West Asia”.

Other Asian markets also reflected mixed trends. Japan’s Nikkei 225 index declined by 1 per cent to the 56,845 level, while Hong Kong’s Hang Seng index fell by 0.63 per cent to 26,536. Taiwan’s markets remained closed. Singapore’s Straits Time index rose marginally by 0.15 per cent to 5007, while South Korea’s market witnessed a strong rally with a jump of more than 1 per cent to 5,762.

US markets also closed lower on Thursday, adding to global caution. The S&P 500 declined by 0.28 per cent to 6861, while the Nasdaq fell by 0.36 per cent to 22,672.72. So the rising geopolitical tensions, elevated crude oil prices, and global market weakness continue to weigh on investor sentiment, keeping the outlook cautious in the near term. (ANI)