Hormuz attacks push Indian equities toward lower open
Escalating US-Iran military clashes and the closure of the Strait of Hormuz are driving a risk-off sentiment that threatens to push Indian benchmark indices lower for a second consecutive session.
Indian stocks are poised to extend losses on Tuesday as the closure of a critical oil shipping route intensifies global risk aversion. Early indicators from GIFT Nifty pointed to a gap-down opening, with the contract trading around 24,124, a notable discount to the Nifty 50's previous close of 24,238.50.
The catalyst for the flight to safety is a sharp escalation in Middle Eastern geopolitics. Iran's Revolutionary Guards claimed attacks on US military assets in Bahrain and stated the Strait of Hormuz would remain closed as long as American military operations continue. Two oil tankers caught fire in the area, underscoring the physical risks to global energy supply chains.
The negative start in Asia follows a weak session on Wall Street, where equities closed lower overnight ahead of a heavy corporate earnings calendar. The threat to energy flows had already weighed heavily on domestic benchmarks on Monday, with the Sensex shedding 442.93 points, or 0.57%, to close at 77,708.52. The Nifty 50 fell 0.39% to settle at 24,238.50.
"Nifty 50 once again failed to cross the 24,400 mark, reinforcing the ongoing range-bound trend," said Ajit Mishra, Senior Vice President of Research at Religare Broking. "Immediate support is placed in the 24,000–23,800 zone, while a decisive breakout above 24,400 could trigger the next leg of the recovery. Despite the choppiness in the benchmark index, rotational buying across sectors and the resilience of the broader markets continue to offer ample stock-specific trading opportunities."
Currency and commodity markets reflected the heightened uncertainty, with the dollar index holding steady at 100.96, near a one-week high. The greenback traded at 162.50 against the Japanese yen, while the euro stood at $1.1415. Spot gold remained elevated at $4,008.83 per ounce, while silver eased 0.2% to $56.31.
Crude prices edged slightly lower, with Brent slipping 0.37% to $88.89 a barrel and WTI at $82.47, as fresh diplomatic efforts tempered some immediate supply fears. However, the underlying risk of a prolonged Strait of Hormuz closure keeps a floor under energy prices.
"Indian equity markets are expected to open on a subdued note as investors remain cautious amid escalating geopolitical tensions in the Middle East, elevated crude oil prices, persistent foreign portfolio investor (FPI) selling, and continued weakness in the Indian rupee," said Ponmudi R, CEO of Enrich Money. "The combination of external headwinds has reinforced a risk-off mood, limiting investors' appetite for equities."
