India stocks set for weak open as Middle East tensions push crude above $90
Indian equities are poised for a subdued start as escalating US-Iran military strikes drive Brent crude above $90 a barrel, threatening to overshadow a strong domestic earnings season led by major banks.
Indian benchmark indices are likely to open lower on Monday, with Gift Nifty trading down 29.2 points at 24,292.5 early in the session. The weakness follows a sharp sell-off in global technology stocks and rising geopolitical instability across the Middle East.
The primary catalyst for the risk-off mood is the rapid deterioration of US-Iran relations. Following the reported death of an American service member, the US launched additional airstrikes on Iran, which retaliated by firing missiles toward Jordan and prompted Bahrain to activate air raid sirens.
The escalation has triggered a severe rally in oil prices, raising the prospect of prolonged supply disruptions. Brent crude climbed 2.7% to $90.49 a barrel after surging nearly 16% last week, while WTI crude rose 2.3% to $84.42.
These external headwinds arrive just as India’s domestic earnings season gains momentum. Major lenders including HDFC Bank, ICICI Bank, and Axis Bank reported June-quarter results over the weekend. Their management commentary is expected to dictate near-term sector direction. On Friday, the Sensex surged 1.25% to 78,151.45 and the Nifty 50 climbed 1.09% to 24,334.30, driven by heavyweight buying ahead of these releases.
Technical resistance tests
Analysts note a tension between cautious global sentiment and resilient domestic technicals. Ajit Mishra, Senior Vice President of Research at Religare Broking, said the Nifty 50 has rebounded from key support and breached 24,300 resistance. "A sustained move above the 24,400 zone, which coincides with 200-day EMA, could pave the way for an extension towards the 24,600 mark and beyond," Mishra said, pegging near-term support at 24,000.
The banking sector is drawing specific attention. Ponmudi R, CEO of Enrich Money, noted that Bank Nifty continues to trade with a positive bias, facing immediate resistance in the 58,600–58,700 zone. "A sustained breakout above this band could reinforce bullish momentum and pave the way for an advance towards the 59,000 psychological mark," Ponmudi said.
Defensive positioning
"Investor sentiment is likely to remain cautious as escalating geopolitical tensions in the Middle East continue to cloud the global risk environment," Ponmudi said. He added that the uncertainty has prompted a defensive stance, limiting investors' willingness to take aggressive directional bets as crude advances to the $83–84 per barrel range.
In other asset classes, gold prices eased as hawkish Federal Reserve commentary pushed back expectations for rate cuts. Spot gold fell 0.4% to $4,000.55 an ounce, while spot silver bucked the trend, rising 0.9% to $56.42.
