The stock market is likely to open lower on Monday, tracking weak global cues and rising tensions in the Middle East. Investor mood remains cautious as oil prices have surged and foreign investors continue to pull out money.
Early signals suggest a weak start. GIFT Nifty futures were trading at 22,564.5 at 8:04 am, indicating that the benchmark Nifty 50 may open below Friday’s close of 22,819.6.
Asian markets have declined sharply, with stocks falling 1.9%. At the same time, Brent crude oil has crossed $115 a barrel and is set for a record monthly rise. Higher oil prices are adding pressure on global markets and affecting risk appetite.
The US-Israeli war on Iran has now entered its fifth week and is spreading across the Middle East. Over the weekend, Yemen’s Iran-aligned Houthis launched attacks on Israel. This has raised concerns about possible disruptions in key shipping routes around the Arabian Peninsula and the Red Sea.
Pakistan has said it is preparing to host “meaningful talks” in the coming days to end the war. However, tensions remain high as Iran has warned that it will respond if the United States deploys troops on the ground.
Markets have already seen a sharp fall due to global uncertainty. The Sensex and Nifty 50 have dropped about 9.5% since February 28, when the conflict began.
The Indian rupee has also come under pressure and slipped to a record low of 94.84 against the US dollar. A weak rupee increases import costs, especially for crude oil, which can impact inflation and corporate earnings.
Foreign institutional investors have continued to sell Indian equities. On Friday, they sold shares worth Rs -4,367.30 crore. This has taken total outflows in March to a record $12.3 billion, according to provisional data.
The continued selling shows that global investors remain cautious about Indian markets in the current environment.
Vinod Nair, Head of Research at Geojit Investments Limited, said, “In the near term, market direction will hinge on developments in West Asia peace efforts and the extent of earnings risks from supply-side disruptions.”
He added, “FIIs are expected to stay selective as India remains relatively expensive versus other emerging markets, though the valuation premium has moderated toward long-term averages and could stabilise flows gradually.”
He further said, “Volatility may persist as global risk appetite fluctuates, but further dips could improve entry opportunities for long-term investors when external uncertainties begin to normalise as valuation gaps narrow.”
In a separate move, the central bank has tightened limits on lenders’ net open foreign exchange positions. This step is aimed at reducing volatility in the rupee, which has been weakening due to global factors and steady foreign outflows.
The overall market setup remains weak. Rising oil prices, global tensions, and continued foreign selling are likely to keep pressure on equities.
Investors will watch developments in the Middle East closely. Until there is more clarity, volatility is expected to remain high, and markets may stay under pressure in the near term.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)