Escalating US-Iran Tensions Send Global Markets Plunging; GIFT Nifty Falls Amid Crude Oil Surge

Escalating US-Iran Tensions Send Global Markets Plunging; GIFT Nifty Falls Amid Crude Oil Surge​

Indian equity indices, Sensex and Nifty, are poised for a cautious start on Thursday as the markets grapple with escalating geopolitical risks. GIFT Nifty is signaling a weak opening due to renewed military tensions between the United States and Iran, combined with sharp increases in crude oil prices and signs of global market deterioration. This outlook follows a largely mixed trading session on Wednesday, where gains in FMCG and private banking were insufficient to offset sector-wide weakness.

Global Markets React to Middle East Escalation​

Overnight, global sentiment significantly deteriorated following the renewed action taken by the United States against Iranian targets. Tehran responded immediately by announcing the closure of the Strait of Hormuz, a move that instantly rattled international financial markets. This escalation has reignited deep concerns regarding regional conflict and sustained energy supply stability globally.

Wall Street witnessed a broad selloff as investors processed the combination of Middle East tension, higher oil costs, and hotter-than-expected US inflation data. The Dow Jones fell 1.9 percent, while the S&P 500 lost 1.6 percent. Nasdaq also declined nearly 2 percent, with technology and semiconductor stocks remaining under consistent pressure following their recent correction.

Crude Oil Surge Triggers Inflation Fears​

Crude oil prices surged drastically after Iran declared the Strait of Hormuz closed. Brent crude climbed more than 2 percent to approximately $95.40 per barrel. Meanwhile, WTI crude rose nearly 3 percent to $92.63 per barrel. This sharp movement has intensified global concerns over energy supplies and future inflation, particularly impacting oil-importing nations like India.

Expert View: Caution Dominates Market Outlook​

Ponmudi R, CEO of Enrich Money, noted that investors are likely to maintain a cautious stance as they navigate the intersection of geopolitical risk and a worsening macroeconomic environment. The fresh military action by the United States against Iran has amplified fears of a broader regional conflict, prompting defensive positioning across global equities. Furthermore, rising US inflation reinforces expectations that the Federal Reserve may sustain a restrictive policy stance for an extended period.

Institutional Flows and Sectoral Support​

On domestic institutional flows, Foreign Institutional Investors (FIIs) were net sellers on June 10, offloading equities worth Rs 2,124 crore. However, Domestic Institutional Investors (DIIs) provided meaningful support to the market, purchasing shares valued at Rs 3,123 crore.

Technical Outlook for Nifty and Bank Nifty​

From a technical standpoint, the market indices have critical levels to watch immediately. For the Nifty, immediate resistance is expected in the 23,400-23,450 zone. A confirmed breakout above this band could open pathways toward 23,550 and eventually 23,800. Crucially, the 23,100-23,000 range remains a vital support area; a fall below these levels could expose the index to 22,800-22,700 ranges.

For Bank Nifty, key resistance is pegged between the 55,300-55,500 range. The primary support zone for this sector remains established in the 55,000-54,800 area.