Sensex and Nifty are likely to open on a subdued note on Tuesday after Monday’s sharp rally, as renewed military action in Iran and a rebound in crude oil prices weighed on sentiment despite broadly positive Asian markets and improving institutional flows.
GIFT Nifty was trading at 24,040 in early trade, down 87 points or 0.36 percent from Nifty futures’ previous close, indicating a mildly negative start for benchmark Indian equity indices. Earlier, the Nifty surged 312 points or 1.32 percent to reclaim the 24,000 mark and close at 24,031.70 on Monday. The Sensex had rallied 1,073.61 points or 1.42 percent to end at 76,488.96, helped by a sharp fall in crude oil prices, gains in the rupee and optimism surrounding a potential US-Iran agreement.
Global cues were mixed on Tuesday morning. Asian equities remained resilient, with the MSCI Asia Pacific Index rising 0.5 percent, led by gains in South Korea after markets reopened following a holiday. S&P 500 futures were also up 0.6 percent, although investor enthusiasm cooled after reports that the US military carried out strikes on targets in southern Iran, raising fresh doubts over the pace of diplomatic progress in the region.
Share Markets Live Updates | Sensex, Nifty, GIFT Nifty Today
US cash markets remained shut overnight for the Memorial Day holiday, leaving investors focused on geopolitical developments and commodity markets.
Crude oil prices rebounded after Monday’s steep selloff. Brent crude futures rose nearly 1.5 percent to $97.56 per barrel in early Asian trade after tumbling 7 percent in the previous session. U.S. WTI crude traded around $91.25 a barrel. The recovery followed reports of US military strikes on missile launch sites and vessels in southern Iran, actions Washington described as defensive measures aimed at protecting its forces in the region.
The rebound in oil prices comes after markets had aggressively priced in hopes of a breakthrough in US-Iran negotiations and a possible reopening of the Strait of Hormuz. The Strait is the key energy corridor through which roughly one-fifth of global oil shipments normally pass.
Foreign institutional investors turned net buyers on Monday after four consecutive sessions of selling, purchasing equities worth Rs 821 crore. Domestic institutional investors extended their buying streak, investing Rs 3,856 crore and continuing to provide support to the market.
Ponmudi R, CEO of Enrich Money, said that the sentiment remains cautiously constructive as softer crude prices, a stabilising rupee and improving diplomatic signals have strengthened risk appetite. He said that crude has corrected sharply from recent highs and the rupee has recovered towards the 95.2 level, easing concerns around inflation, import costs and broader macroeconomic stability.
On the technical front, Ponmudi said Nifty has improved its near-term structure after decisively reclaiming the 24,000 mark. Sustained trading above this level could open the path towards the 24,200-24,400 zone, while 23,800 remains an important support area. For Bank Nifty, resistance is seen near 55,400 and then 55,800-56,000, while support is placed around 54,700-54,600.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
