Nifty faces weak open as US-Iran conflict drives crude higher
Escalating US-Iran tensions are lifting crude oil prices and pressuring Indian equities, with the Nifty 50 bracing for a gap-down open as traders navigate tight technical ranges.
Indian equities are poised for a weaker start on Tuesday as rising crude oil prices weigh on regional investor sentiment. This pressure stems from an escalating US-Iran conflict that is disrupting global risk appetite.
The benchmark BSE Sensex closed Monday marginally higher, adding 47.01 points or 0.06% to settle at 77,616.40. The NSE Nifty 50 eked out a gain of 4.10 points, or 0.02%, to close at 24,211.00 after a volatile session marked by selective buying.
However, offshore indicators point to a sharp pullback at the open as Gift Nifty traded near 24,049, down 193 points from the previous Nifty futures close. This divergence follows a mixed Asian session where South Korea's Kospi climbed 2.22% and Japan's Topix advanced 0.30%, while the KosDAQ declined 1.34%, the Nikkei 225 slipped 0.01%, and Hong Kong's Hang Seng Index futures pointed lower.
Geopolitical tensions are dictating near-term trading dynamics. Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher, noted that the Nifty sustained a key support zone on Monday despite a weak bias and gap-down opening.
The technical outlook suggests traders should brace for continued turbulence, with daily Nifty support pinned at 24,000. “With the geo-political tensions looming around, volatility is anticipated and as mentioned earlier, the index would have the important near-term support at 23800 zone whereas on the upside, a decisive move above the resistance hurdle at 24400 is necessary to trigger for fresh upward move in the coming days,” Parekh said.
The banking sector is displaying similar consolidation. Bank Nifty erased early losses on Monday to close above 58,100, but remains trapped in a tight range with a daily span of 57,300 to 58,800. The ongoing earnings season is expected to inject further fluctuations into the index.
A decisive breakout is required to establish a new directional trend. “With the result season on, we expect fluctuations and as mentioned earlier, the index would have the near-term support at the 50EMA zone at 56500 level which needs to be sustained, whereas on the upside, a decisive breach above the 58600 zone is necessary to confirm a breakout and trigger for fresh upward move,” Parekh added.
For intraday traders navigating this constrained environment, Parekh identified UPL, Karnataka Bank, and NTPC as actionable targets. She recommended buying UPL at ₹592 with a target of ₹610 and a stop loss at ₹585. Karnataka Bank was rated a buy at ₹279, targeting ₹288 with a stop loss at ₹275, while NTPC was a buy at ₹350, aiming for ₹360 with a stop loss at ₹344.
