Indian equities open lower amid US-Iran ceasefire uncertainty, oil price surge

NEW DELHI: Indian equities opened on a cautious, negative note Monday, as investor sentiment weakened amid growing uncertainty over US-Iran negotiations and conflicting signals from both sides’ leadership. Benchmark indices reflected the subdued mood early in the session. The BSE Sensex slipped 122.01 points (-0.16 per cent) to 78,371.53, while the NSE Nifty 50 edged down 14.40 points (-0.06 per cent) to 24,339.15 at 9.15 am.

The lack of clarity around peace talks has unsettled markets. While a temporary ceasefire had earlier raised hopes of a diplomatic breakthrough, recent contradictory statements from US and Iranian leadership have cast doubt on the durability of any agreement. This ambiguity has eroded confidence, with investors increasingly wary of a sudden escalation.

Adding to the unease, global oil prices surged sharply after fresh tensions in the region heightened fears of supply disruptions. Brent crude rose 4.72 per cent to $94.65 per barrel, while WTI climbed 5.51 per cent to $88.47, reinforcing inflationary concerns and pressuring equity valuations.

The volatility weighed on US equity expectations, with Dow Jones Futures dropping 367.44 points, or 0.74 per cent, in early trade. Gold prices softened slightly, trading at $4,807.93 per ounce.

In the Asian markets, Japan’s Nikkei 225 rose 614.10 points, or 1.05 per cent, to reach 59,090.00. South Korea’s KOSPI added 1.32 per cent to 6,273.92, and the Taiwan Weighted index gained 413.85 points to trade at 37,218.19. In Hong Kong, the Hang Seng edged up 0.61 per cent to 26,321.00, while China’s Shanghai Composite recorded a 0.52 per cent increase. Conversely, Singapore’s Straits Times index saw a marginal decline of 0.06 per cent, according to market data.

Ajay Bagga, a banking and market expert, said that the markets are currently navigating a “twilight zone” between Friday’s euphoric record highs and the looming reality of the Wednesday ceasefire deadline. He noted that while equity traders spent the weekend dreaming of a geopolitical “Grand Bargain,” the commodities desk tells a much more sober story regarding the current state of global stability.

“Friday was a session for the history books. The S&P 500 surged to a record close of 7,126, fueled by a wave of ‘peace trade’ optimism. Investors were aggressively pricing in a permanent resolution to the US-Iran friction, betting that the two-week ceasefire would transition into a long-term treaty. However, as we open this Monday morning, that ‘high’ is fading. The S&P 500 has drifted back toward the 7,074 level in early trading. We are seeing a classic ‘buy the rumor, wait for the signature’ pattern. The market is beginning to realize that ‘in-principle’ agreements are not the same as signed documents, especially with the Wednesday ceasefire deadline approaching like a freight train”, Bagga said.

Ponmudi R, CEO of Enrich Money, said that Indian equity markets were expected to open on a cautious note, with renewed geopolitical tensions weighing on investor sentiment. He explained that although a two-week ceasefire offered some relief earlier, remarks by US President Donald Trump accusing Iran of violations have dented confidence in the diplomatic process.

“Adding to the concerns, oil prices have surged sharply, with an approximate 7 per cent spike, amid the approaching ceasefire deadline, intensifying fears of supply disruptions. This escalation has reversed the recent decline in crude prices, with Brent crude now trading in the $95-98 per barrel range. These developments have dampened earlier optimism and heightened uncertainty surrounding negotiations, keeping markets on edge. Elevated geopolitical risks may lead to renewed FII outflows or reduced participation, as risk aversion increases”, Ponmudi stated.

Shrikant Chouhan, head of equity research at Kotak Securities, said that on weekly charts, the market forms a bullish candle, and on daily charts, it holds a higher bottom formation, which is largely positive. He noted that the market is currently trading comfortably above short-term averages, which supports a further uptrend from the current levels.

“On the downside, 24,100/77800 and 23,800/77000 would act as key support zones, while 24,700/79500 and 24,950/80250 could be the key resistance areas for the bulls. However, below 24100/77800, sentiment could change, and the index may retest the level of 23,800-23,500/77000-76000. For Bank Nifty, as long as it is trading above 55,800, an uptrend is likely to continue. On the higher side, it could move up to the 200-day SMA, around 57,300. Further upside may also continue, potentially lifting the index to 57,800-58000”, Chouhan explained. (ANI)