Gift Nifty Signals Flat-to-Negative Start As West Asia Tensions, Crude Oil Weigh on Sentiment

The Gift Nifty on Tuesday indicated a cautious start for Indian equities, with the index trading 15 points, or 0.06%, lower at 24,616.5 around 7:54 am on Tuesday, August 11. The subdued Gift Nifty trend comes as investors remain cautious amid uncertainty over US-Iran negotiations concerning the reopening of the Strait of Hormuz.

Rising crude oil prices and renewed geopolitical concerns have added to the pressure on global risk sentiment, while investors are also awaiting key US inflation data for further clues on the Federal Reserve’s interest-rate trajectory.

Indian benchmark indices ended marginally higher in the previous session after a volatile trading day. The Sensex closed at 78,542.44, gaining 43.27 points, or 0.06%, while the Nifty 50

settled at 24,583.80, up 13.15 points, or 0.05%.

Ponmudi R, CEO of Enrich Money, said Indian equity markets are likely to trade with a cautious bias as uncertainty surrounding US-Iran negotiations over the reopening of the Strait of Hormuz continues to weigh on global sentiment.

“Indian equity markets are expected to trade with a cautious bias as uncertainty surrounding US-Iran negotiations over the reopening of the Strait of Hormuz continues to weigh on global risk sentiment,” Ponmudi said.

He added that renewed geopolitical uncertainty has triggered a rebound in crude oil prices, contributing to a weaker close on Wall Street and a subdued start across Asian markets.

The negotiations between Washington and Tehran have entered a more complicated phase. US President Donald Trump has called for compensation from Iran, while Tehran has reiterated its conditions for reopening the Strait of Hormuz. This has raised uncertainty over when, and under what conditions, the crucial shipping route could reopen.

The development is particularly important for financial markets because prolonged disruption around the Strait of Hormuz could keep a significant geopolitical premium embedded in crude oil prices.

Crude Oil Prices Rise as Strait of Hormuz Uncertainty Persists

Crude oil prices climbed on Tuesday as hopes of a quick resolution to the US-Iran standoff faded. Brent crude futures rose to around $88 a barrel, while US West Texas Intermediate crude traded near $82.45 a barrel. Both benchmarks had gained around 5% in the previous session.

Higher crude prices are a key concern for India because the country imports a large proportion of its crude oil requirements. A sustained increase in oil prices can put pressure on India’s import bill, current account, inflation and the rupee.

Ponmudi said WTI crude was holding its recent gains near the $82-per-barrel mark as uncertainty over the Strait of Hormuz negotiations kept a geopolitical risk premium in energy prices.

The rise in oil prices also comes ahead of the US consumer price inflation report, which could influence expectations around the Federal Reserve’s monetary policy.

Asian Markets Remain Cautious

Asian markets were mixed in early trade as investors assessed the latest developments in the Middle East alongside the potential impact of higher energy prices on global inflation.

South Korea’s Kospi was under pressure in early trading, while Japan’s Nikkei remained closed for a market holiday. MSCI’s broadest index of Asia-Pacific shares outside Japan moved between gains and losses.

US stock futures were relatively steady after Wall Street ended lower in the previous session. S&P 500 futures edged higher, while Nasdaq futures also traded in positive territory.

MSCI’s broadest index of Asia-Pacific shares outside Japan swung between losses and gains and was last up 0.2% while South Korea’s Kospi rose 0.3%, as the latest escalation in Gulf hostilities kept market sentiment fragile.

Nasdaq futures edged 0.28% higher while S&P 500 futures added 0.1% after Wall Street ended lower in Monday’s cash session. EUROSTOXX 50 futures slipped 0.05%, while FTSE futures and DAX futures were flat.

The cautious global setup suggests Indian markets could remain sensitive to developments in crude oil, geopolitical headlines and global bond yields during Tuesday’s session.

Gold Near $4,400 as Investors Seek Safe-Haven Assets

Gold prices remained well supported amid geopolitical uncertainty. Spot gold was trading around $4,410 an ounce, while investors continued to seek safe-haven assets amid concerns over the potential economic consequences of prolonged tensions in the Middle East.

Ponmudi said gold was trading close to the $4,400-per-ounce level as investors continued to seek safety amid geopolitical uncertainty.

Attention is now turning towards US inflation data, which could influence Treasury yields, the dollar and global capital flows, including flows into emerging markets such as India.

Nifty 50 Technical Outlook

According to Ponmudi, the Nifty 50 is likely to remain range-bound between 24,500 and 24,700 in the near term as the index continues to consolidate within a defined trading range.

“The 24,600-24,700 region remains the key resistance band. A sustained breakout above 24,700 could strengthen buying momentum and pave the way for an advance towards the 24,800-25,000 levels,” he said.

On the downside, 24,500 remains the immediate support level for the Nifty. The options data also indicates significant Put open interest around the 24,500 strike, which could provide some downside cushioning.

However, a decisive break below 24,500 could weaken the near-term technical structure and expose the index to the 24,400-24,300 levels.

“Overall, the bias remains cautiously positive above 24,500, with a decisive breakout above 24,700 or breakdown below 24,500 providing a clear directional signal,” Ponmudi said.