Geopolitical Tensions Force Cautious Start: Indian Markets Hover as Oil Surges Amidst US-Iran Dispute

Geopolitical Tensions Force Cautious Start: Indian Markets Hover as Oil Surges Amidst US-Iran Dispute​

Indian benchmark indices are set for a cautious start on Monday, as the market digests persistent global uncertainties. GIFT Nifty is trading marginally lower, signaling continued caution ahead of the new trading week. The mood remains subdued amid ongoing geopolitical tensions and elevated crude oil prices, which are continuing to embed a risk premium into commodity costs.

Indian Equities Face Pressure Amidst Persistent Red Streak​

The domestic market saw slight declines on the morning trade. GIFT Nifty was recorded at 24,398 at 7:45 am, marking a marginal dip of 33 points, or 0.14 percent for the Nifty 50. The Sensex fell by 70.71 points, or 0.09 percent, settling at 78,009.25. The Nifty declined by 29.85 points, or 0.12 percent, closing at 24,366. These numbers follow a tough Friday for the Indian stock markets, where selling pressure in metal, auto, and IT sectors weighed heavily on the benchmarks.

Global Markets and Oil Price Stability Under Uncertainty​

Asian equities showed a subdued performance as investors remained wary of the inflationary consequences of high crude oil prices. Progress toward a peaceful resolution between the US and Iran remains stalled, with continued uncertainty surrounding tanker traffic through the Strait of Hormuz. The MSCI broadest index of Asia-Pacific shares outside Japan was flat, though Japan's Nikkei 225 edged 0.4 percent higher.

Crude Oil Prices Hold Strong as Geopolitical Risks Persist​

Crude oil maintained its gains on Monday despite remaining largely steady in the immediate trading session. Brent crude held at $88.55 a barrel, having surged by 6 percent over the previous week. The geopolitical risk premium continues to keep prices elevated due to supply concerns passing through the Strait of Hormuz. Meanwhile, US West Texas Intermediate crude slipped marginally to $82.26, following a 5.4 percent gain over the last week.

Technical Outlook and Institutional Flows Provide Key Support​

Bajaj Broking suggests that the Nifty is likely to consolidate within the critical range of 24,200-24,700. Immediate technical support is placed at 24,200, with secondary support levels identified at 24,000 and 23,800. A decisive shift away from the recent pattern of lower highs and lower lows would signal a potential resumption of the uptrend in the indices.

Institutional Flows Offer Marginal Support to Domestic Market​

Institutional flows offered some marginal support during the previous trading session. Foreign institutional investors (FIIs) turned into net buyers on August 14, purchasing Indian equities worth Rs 508.12 crore. Domestic institutional investors (DIIs) also remained supportive, investing Rs 356.40 crore. While the return of foreign buying provides a degree of support after recent FII selling, near-term sentiment remains highly sensitive to developments in oil prices and geopolitical unrest.