Stock markets are likely to open lower on Tuesday as investors remain cautious ahead of a key . The uncertainty around the reopening of the Strait of Hormuz, a key oil route, is keeping sentiment weak.
GIFT Nifty futures were trading at 22,889.5 at 8:01 am, indicating that the Nifty 50 may open below Monday’s closing level of 22,968.25.
This comes after a volatile session on Monday when both the and Nifty opened lower but later recovered to end about 1.1% higher.
The rise was driven by hopes of a quickly as both sides exchanged strong statements.
Tensions have risen again after Trump repeated his warning to strike ’s power plants and civilian infrastructure if a deal is not reached. He has set a deadline of 5:30 am on Wednesday, for Iran to agree to reopen the Strait of Hormuz.
Iran, however, has said it is looking for a permanent end to the conflict rather than a temporary ceasefire. This difference in stance has added to uncertainty in global markets.
prices have moved higher amid the rising tensions. Brent crude was hovering around $111 per barrel. Higher oil prices are a concern for India as they increase the import bill and can put pressure on economic growth as well as company margins.
Other Asian markets were trading slightly higher, with the regional index up about 0.6%, but the gains have not eased concerns in Indian markets.
Since the Iran conflict began on February 28, both the Sensex and Nifty have fallen about 9%. Foreign institutional investors have sold shares worth $15.8 billion during this period. Out of this, a record $12.7 billion worth of shares were sold in March alone.
The continued outflow of foreign funds has been one of the key reasons behind the pressure on markets.
Investors will also keep a close watch on domestic triggers. Rate-sensitive sectors such as banks, non-bank lenders, auto, consumer and real estate companies will be in focus ahead of the Reserve Bank of India’s policy decision on Wednesday.
The RBI is expected to keep interest rates unchanged as it assesses the impact of global developments, including the Iran conflict.
Hitesh Tailor, Technical Research Analyst at Choice Equity Broking Private Limited, said, “From a technical standpoint, the index has shown a continuation of the recovery trend, with improving price structure and sustained buying interest at lower levels.”
He added, “Key technical levels indicate that support is placed in the 73,300–73,500 zone, which is expected to act as a demand area on declines, while resistance is seen around 74,500–74,800, where any further upside may face supply and profit-booking pressure.”
On the near-term outlook, he said, “With a strong close and follow-through buying, the near-term outlook remains cautiously positive, though the index may witness some consolidation near resistance levels before any decisive breakout.”
Overall, markets are expected to remain volatile through the day. Global cues, especially developments around the US-Iran situation, along with oil prices and foreign investor activity, will be key factors driving market direction.
(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.)