GIFT Nifty Signals Steady Start as Asian Markets Rally, Cautious Sentiment Persists Over Oil and Strait of Hormuz

GIFT Nifty Signals Steady Start as Asian Markets Rally, Cautious Sentiment Persists Over Oil and Strait of Hormuz​

Indian benchmark indices Sensex and Nifty are set for a steady to mildly positive open on Monday, buoyed by strong gains in Asian markets and Friday's robust rally on Wall Street. However, lingering uncertainty over the full reopening of the Strait of Hormuz and a rebound in crude oil prices may keep investors cautiously optimistic as they navigate key geopolitical risks.

GIFT Nifty Predicts Flat-to-Positive Opening for Indian Markets​

GIFT Nifty indicated limited gains for the market, trading at 24,660 around 8 am. This represents an increase of 18.5 points or 0.08 percent from Friday's close of 24,570.65 for the Nifty 50.

The domestic benchmarks showed mixed action in the previous session. The Sensex fell 455.59 points, or 0.58 percent, settling at 78,499.17. Similarly, the Nifty declined by 65.35 points, or 0.27 percent, closing at 24,570.65 as weakness in financial stocks outweighed gains seen in auto and IT shares.

Asian Markets Rise Amid Post-Wall Street Correction​

Asian equities showed resilience on Monday, trading higher after Friday's strong showing in US markets. The initial surge was prompted by weaker US employment data, which tempered expectations regarding an immediate interest-rate increase from the Federal Reserve during its September meeting.

In Asia, Japan's Nikkei 225 gained 0.6 percent, while South Korea’s benchmark advanced 0.5 percent. MSCI's broadest index of Asia-Pacific shares outside Japan also recorded a gain of 0.3 percent.

US Equities Hit Record High on Jobs Data​

US markets delivered strong support to Asian sentiment after showing that the economy had shed jobs unexpectedly. This data prompted investors to ease expectations regarding near-term rising borrowing costs.

On Friday, the S&P 500 surged by 0.62 percent, closing at a record high. The Nasdaq Composite jumped 1.30 percent, and the Dow Jones Industrial Average rose 0.28 percent. For the full week, the Nasdaq rallied 5.19 percent, the S&P 500 gained 3.58 percent, and the Dow advanced 2.96 percent, supported by positive corporate earnings and easing rate concerns.

Oil Rebounds as Hormuz Uncertainty Persists​

Crude oil prices rose on Monday, driven by persistent uncertainty regarding when the Strait of Hormuz could be fully operational again. Brent crude futures gained 1.09 percent to $84.46 a barrel. US West Texas Intermediate crude also climbed 0.78 percent to $78.79.

Iran stated Sunday that an agreement with Oman defining new shipping lanes through the Strait was in its final stages. However, Tehran maintained that other conditions must be met by the United States before the waterway could reopen completely.

Geopolitical Risk Keeps Middle East Developments Key Focus​

Ponmudi R, CEO of Enrich Money, noted that progress toward the Iran-Oman agreement has boosted sentiment, even though negotiations remain conditional. Aggressive risk-taking remains limited until a formal agreement is achieved regarding the tense geopolitical situation in the Middle East.

The continued pricing of WTI crude around $78-$79 a barrel suggests markets are currently factoring in a premium for the ongoing geopolitical risks.

Technical Outlook and Institutional Support​

Ponmudi stated that the Nifty maintains a constructive technical structure, providing a defined trading range. The 24,600-24,700 zone is identified as the key resistance area; a sustained breakout from this zone could signal stronger bullish momentum, potentially targeting 24,800-25,000.

The immediate support for Nifty remains at 24,500, with the next critical zone marked by 24,400-24,300. Institutionally, foreign institutional investors (FIIs) acted as net buyers on Friday, purchasing Indian equities worth Rs 480 crore. Domestic institutional investors (DIIs) maintained their buying streak for a third consecutive session, investing Rs 235 crore and providing domestic market support.