Domestic markets are likely to open in the red on Wednesday, but analysts expect volatility to continue. Analysts said that risk-off trade will keep markets under bearish grip, but one cannot rule out value buying at lower levels that will help the market stay firm.
Market participants will focus on each and every action and reaction of Iran-Israel/US that will impact global trade and India’s trade balance.
Gift Nifty at around 24,400–24,500 levels indicates a gap-down opening of over 500 points for Nifty and 1,500 points for Sensex.
Trump’s directive to DFC
Meanwhile, US President Donald Trump has directed the Development Finance Corporation (DFC) to provide immediately a very reasonable price, political risk insurance and guarantees for the financial security of all maritime trade, especially energy, travelling through the Gulf. The US president added that the US military will accompany ships through Hormuz if necessary.
If movement of ships happens smoothly, this will bring big relief to countries as this will help in cooling off crude oil prices and pick up in global trade.
Asian stocks tumble
However, this statement failed to assuage market sentiment, as most equities across the Asia-Pacific region are down in early deals on Wednesday. Korea’s Kospi is the worst affected, falling over 5 per cent (with reports of steeper declines in recent sessions amid the tensions).
The Nifty 50 is expected to open with a near 2 per cent decline, potentially in the 24,400–24,500 zone, tracking weak global cues and aggressive FII short positioning in index futures, said Hariprasad K, Founder, Livelong Wealth. Derivative data indicates a sustained downside bias, suggesting the current setup favours a medium-term corrective phase under prevailing positioning. Momentum indicators reinforce the stress conditions, he said.
“If global sell-offs in the US and Europe persist, alongside commodity price spikes and continued FII selling, the index could test the crucial 24,000 support zone, where significant open interest is concentrated. Such a move may represent a liquidity sweep under high-volatility conditions. On the upside, 25,000 now stands as a strong psychological resistance level and will remain the key threshold to monitor for any meaningful revival in bullish momentum,” Hariprasad added.
Sectorally, defence, airlines, tourism, chemicals and oil-linked stocks are expected to remain in focus, as these segments are directly exposed to rising crude prices and war-driven disruptions. Elevated volatility is already evident, with India VIX at elevated levels around 17 (having spiked sharply in recent days), warranting heightened caution, particularly for options traders, said Hariprasad.
Indian equity markets are likely to remain under sustained selling pressure as global risk appetite deteriorates following the widening Israel–US–Iran conflict across West Asia, said Ponmudi R, CEO of Enrich Money. Disruptions to trade flows through the Strait of Hormuz, driven by heightened security risks and rising insurance restrictions, have triggered a sharp surge in crude oil prices, amplifying inflation and supply concerns.
“For India, one of the world’s largest oil importers, elevated energy prices pose a dual risk—widening the current account deficit and intensifying imported inflation pressures. The macro sensitivity to crude remains high, particularly at a time when external balances are closely watched,” he cautioned.
Gaurav Udani, Founder – ThinCredBlu Securities, said given the geopolitical uncertainty, markets are likely to witness extreme volatility and sharp intraday swings. Traders should remain cautious, avoid overtrading, and maintain strict stop-losses in their positions.
“In such conditions, capital preservation becomes more important than aggressive positioning, as sentiment can shift rapidly with incoming news flow.”