Indian stocks set for muted open amid Fed hold, US-Iran strikes

Indian equities are poised for a muted opening on Thursday after a strong rally in the previous session, with early indicators pointing to a gap-down start. Gift Nifty was trading around 24,330, a 19-point discount to the previous close.

The flat outlook comes despite the Sensex surging 889 points, or 1.16%, to close at 77,654.60 on Wednesday, while the Nifty 50 advanced 1.10% to settle at 24,250.20. That rally was driven by heavy buying in banking and IT stocks.

Global market conditions remain fragmented. The US Federal Reserve held its benchmark interest rate steady at 3.50%-3.75% for a fifth consecutive meeting, leaving economic and inflation projections unchanged from June. While US stock futures rose overnight—Nasdaq 100 futures gained 0.7%—the prior regular Wall Street session saw a sharp selloff. The Dow Jones Industrial Average plunged 2.19%, marking its steepest single-day drop since April 2025.

Geopolitical risks are also weighing on sentiment. The United States launched fresh military strikes on Iran on Wednesday in response to attempted attacks on US forces, expanding a five-month regional conflict. Oil prices retreated from a massive previous rally, with Brent falling 1.42% to $89.45 a barrel and WTI declining 0.66% to $83.90, after surging nearly 8% and 6.5% respectively the day before.

The combination of persistent conflict and elevated energy prices has fueled inflationary pressures, keeping gold lower despite a slight overnight bounce. Spot gold gained 0.4% to $4,080.38 per ounce, but remains down roughly 25% since the Iran conflict began as investors price in higher-for-longer interest rates.

For Indian market professionals, domestic catalysts are overriding these global crosscurrents. More than 100 companies, including Bajaj Finance, Tata Steel, Mahindra and Mahindra, Vedanta, and Swiggy, are scheduled to report April-June quarterly earnings on Thursday.