GIFT Nifty Signals Rally as Oil Plunges Amid Easing Middle East Tensions

GIFT Nifty Signals Rally as Oil Plunges Amid Easing Middle East Tensions​

Indian equity markets are poised for a strong opening on Monday, buoyed by positive shifts in global risk appetite. The GIFT Nifty is showing substantial strength, setting up a potential turnaround after Indian indices endured consecutive losses. This bullish outlook follows reports of reduced hostilities between the US and Iran, which sparked a sharp fall in crude oil prices and helped soothe inflation fears globally.

Global Markets React to Diplomatic Hopes​

The decline in geopolitical stress has profoundly impacted commodity markets. As hostile activity appeared to pause, crude oil prices tumbled, with Brent retreating 5.2 percent to $91.73 a barrel. US West Texas Intermediate (WTI) also fell sharply, dropping 5.4 percent to $84.45. Both benchmarks reached their lowest levels in nearly a week after previously surging briefly above $100 per barrel during conflict escalations.

Asian equities responded positively to this climate shift. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.3 percent, while South Korea's Kospi advanced 0.6 percent and Japan's Nikkei climbed 0.4 percent. US futures also pointed toward a robust start, with S&P 500 futures rising 0.8 percent and Nasdaq futures gaining 1.3 percent ahead of key corporate earnings and the Federal Reserve policy meeting.

GIFT Nifty Points to Sharp Rebound for Indian Indices​

The optimism surrounding commodity price cooling is reflected in the advanced indicator, GIFT Nifty. Trading at 23,958 around 8:00 am, GIFT Nifty was up 130 points or 0.55 percent. This suggests that Nifty 50 could open well above Friday's close of 23,767.45. The positive sentiment provides a stark contrast to Friday, when the Sensex had fallen 331.62 points (0.43 percent) to 76,059.77, and Nifty declined 102.15 points (0.43 percent).

Expert View: Navigating Technical Support and Resistance​

Market sentiment remains heavily tied to developments in the Middle East and commodity price movements. Experts note that the decline in oil prices can help alleviate inflation concerns, thereby reducing pressure on central banks regarding monetary tightening. However, technical guidance suggests a cautious approach for short-term investors.

Ponmudi R, CEO of Enrich Money, noted that while the Nifty maintains a bearish near-term bias, a sustained move above the 23,800 to 24,000 zone is necessary to improve sentiment and target 24,200. Crucial support levels have been identified in the 23,700 to 23,600 area; a break below 23,600 could extend the decline toward the 23,500 to 23,300 zone.

Institutional Buying and Selling Snapshot​

Institutional flows on Friday showed mixed participation across market segments. Domestic institutional investors (DIIs) continued to provide supportive buying, purchasing equities worth Rs 5,453 crore. Conversely, Foreign institutional investors (FIIs) remained net sellers for the third consecutive session, offloading equities worth Rs 3,892 crore, according to provisional exchange data.