India equities set for lower open as US-Iran conflict spikes oil
Indian benchmark indices are poised to open lower on Monday as escalating US-Iran military strikes push crude prices higher, threatening to revive inflationary pressures and widen India's trade deficit.
Gift Nifty indicators point to a gap-down start for Indian equities on Monday, snapping the momentum from a strong Friday session. By early trading, Gift Nifty was at 24,048.5, a discount of 193.4 points from Friday's close. The shift in sentiment follows reports of expanded US military strikes on Iran.
The anticipated retreat comes despite broad-based buying that lifted the Sensex 827.57 points, or 1.08%, to 77,569.39 on Friday. The Nifty 50 climbed 244.10 points, or 1.02%, to settle at 24,206.90. However, Iranian state media reported a fresh round of US strikes targeting broader areas across southern and western Iran.
The geopolitical escalation poses a direct macroeconomic threat to India as a major net oil importer. Brent crude surged 3.88% to $78.96 a barrel, while WTI climbed 4.01% to $74.27, driven by conflicting claims over the Strait of Hormuz. The US maintains the critical shipping route is open, while Iran claims it has closed the waterway.
Ponmudi R, CEO of Enrich Money, noted that the renewed tensions have reignited concerns over global energy supplies and heightened risk aversion. "Sustained strength in energy prices could keep inflationary pressures elevated, widen India's import bill, and remain a key headwind for the country's macroeconomic outlook," Ponmudi warned.
Global markets are rapidly repricing the inflationary impact of the energy shock. US two-year Treasury yields rose 3 basis points to 4.24%, the highest since February 2025, while the 10-year yield added 2 basis points to 4.58%. US stock futures slipped as investors priced in the possibility that central banks will keep interest rates higher for longer.
Higher rate expectations also pressured precious metals, with spot gold falling 1.2% to $4,072.78 an ounce and spot silver dropping 1.6% to $58.89. Asian markets traded mixed in early Monday dealings, reflecting a divided outlook between domestic resilience and external geopolitical risks.
Despite the bearish global cues, domestic technicals suggest underlying support levels may hold. Ajit Mishra, Senior Vice President of Research at Religare Broking, noted the Nifty 50 has successfully defended the 23,800 support zone. "A sustained move above the 24,150 zone could pave the way for an extension towards the 24,400–24,600 region," Mishra said.
For the banking sector, Ponmudi highlighted that Bank Nifty has reclaimed the 58,000 psychological level, maintaining a constructive technical structure. The index faces immediate resistance in the 58,200–58,300 zone, with strong support established between 57,700 and 58,000. A decisive break below 57,700 could trigger profit booking and push the index toward 57,300.
