GIFT Nifty Signals Sharp Gap-Down as Brent Crude Tops $100 Amid Middle East Tensions

GIFT Nifty Signals Sharp Gap-Down as Brent Crude Tops $100 Amid Middle East Tensions​

Indian equity markets face a daunting outlook on Friday, with the pre-market data suggesting a sharp opening move. The GIFT Nifty is registering a significant dip, signaling pressure ahead of the market open. This bearish sentiment is primarily driven by crude oil crossing the psychological $100 mark and escalating geopolitical risks in the Middle East.

Crude Oil Soars Past $100; Geopolitics Drive Global Risk-Off Move​

Crude oil proved to be the dominant concern for global investors, as Brent futures surged above the crucial $100-a-barrel level for the first time since May. In early Friday trading, Brent crude was near $100 per barrel after settling 7 percent higher overnight at $102. US West Texas Intermediate crude saw a slight decline of 0.76 percent to $91.49 per barrel, following its previous rise of 6.2 percent.

The rally in oil prices follows recent attacks on Saudi oil tankers by Iran-backed Houthis in the Red Sea. These events, combined with concerns over Iran’s near-closure of the Strait of Hormuz, are significantly adding to global supply instability. Markets are also monitoring temporary production cuts by Kazakhstan following disruptions to its main export route.

Pre-Market Indicators and Global Market Reaction​

The Indian benchmark indices were set for a lower opening based on pre-market readings. GIFT Nifty was trading at 23,666 around 8:00 am, representing a drop of 197 points or 0.83 percent. This indicates that the Nifty 50 could open substantially below Thursday’s closing level of 23,869.60.

Earlier on Thursday, Indian equities had extended their losing streak to four straight sessions. The Sensex fell by 363.7 points or 0.5 percent, closing at 76,391.4, while the Nifty declined 126.7 points to 23,869.6.

Globally, Asian equities tumbled as oil prices surged and fears of inflation intensified. MSCI’s broadest index for Asia-Pacific shares outside Japan fell by 1 percent. Nikkei dropped 2.9 percent, and South Korea's Kospi slumped 3.7 percent. US markets also closed sharply lower on Thursday; the Nasdaq Composite slid 2.15 percent.

Technology Stocks and Earnings Concerns Weigh Investor Sentiment​

Technology stocks faced significant pressure across both Asian and US markets. The concerns were reignited by Alphabet’s earnings, which raised questions over the rate of capital spending in Artificial Intelligence. This sentiment offset some positive news from Intel's quarterly results.

In terms of company-specific action, investors are expected to remain focused on Q1 earning season. Infosys’ American Depositary Receipts (ADRs) fell sharply in overnight US trading after the IT major trimmed the upper end of its FY27 revenue growth guidance. This came despite the company reporting a 12 percent year-on-year rise in first-quarter net profit.

Expert Outlook: Technical Support and Resistance Defined​

Industry experts maintain that global risk aversion, combined with Brent crude exceeding $100 per barrel, continues to place immense pressure on investor sentiment. Ponmudi R, CEO of Enrich Money, noted the volatility surrounding escalating geopolitical tensions.

From a technical standpoint for Nifty, the current bias remains cautious-to-negative. The immediate resistance levels are set at 24,000 and 24,200. Crucially, 23,800 stands as the key support level. A decisive break below this support could extend declines toward the 23,700 to 23,500 zone.

Institutional flow showed a divergence in sentiment on Thursday. Foreign institutional investors (FIIs) remained net sellers for the second consecutive session, offloading equities worth nearly Rs 3,000 crore. Conversely, Domestic institutional investors (DIIs) turned into net buyers after two sessions of selling, purchasing equities valued at Rs 2,947 crore.