Downtrend is likely to continue for Indian stocks amid elevated crude oil prices and rising US treasury yields due to persistent geopolitical tensions, WTI crude has climbed into the $96–97 per barrel range, while Brent is trading above $101.50 per barrel, reinforcing concerns over inflation and pushing U.S. Treasury yields higher as investors reassess the global interest-rate outlook. The combination of elevated energy prices and firming bond yields is likely to keep risk appetite subdued and weigh on emerging-market equities, including India.
Geopolitical risks keep investors cautious
Ponmudi R, CEO of Enrich Money, said: geopolitical risks remain firmly in focus. “While U.S. President Donald Trump said the conflict with Iran could end “immediately” after the midterm elections, the lack of clarity over the path to de-escalation is keeping investors cautious and the geopolitical risk premium firmly embedded in energy markets,” he added.
Gift Nifty at 23,480 signals a gap-down opening of about 50 points.
Asian markets mirror weaker global tone
Asian equities are mirroring the weaker global tone, with Japan’s Nikkei 225 and South Korea’s Kospi both falling more than 1% in early trade after losses on Wall Street and across European markets in the previous session. The subdued regional backdrop is expected to weigh on sentiment at the domestic open.
“Looking ahead, investors will closely watch upcoming U.S. inflation data for fresh clues on the Federal Reserve’s policy trajectory. A stronger-than-expected reading could reinforce higher-for-longer interest-rate expectations, potentially keeping Treasury yields elevated and limiting risk appetite across global equity markets,” he said.
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23,400-23,300 zone crucial for market direction
According to Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, Beyond the opening, the market’s response around the 23,400-23,300 zone will be crucial in determining whether the decline extends further or bargain buying sparks a technical recovery.”Escalating U.S.-Iran hostilities and the continued disruption to global oil supplies remain the dominant sources of risk, keeping investors focused on inflation, energy prices and the broader macroeconomic outlook,” he added.