India equities set to fall as Iran attacks lift oil prices
Indian stocks are poised to open lower on Monday as escalating US-Iran military conflict drives oil prices sharply higher and strengthens the dollar.
GIFT Nifty indicators fell 152 points, or 0.63%, to trade at 24,075, signaling a negative open for Dalal Street. The decline follows US attacks on Iran and Tehran's announcement that it will close the Strait of Hormuz.
Crude oil prices opened sharply higher on the threat to the Strait of Hormuz, a critical transit chokepoint. The resulting inflationary pressure revived expectations that central banks must keep interest rates elevated, driving the dollar sharply higher against most peers. In that specific rate-hike calculus, gold slid over 1% in early Asian trade despite its traditional status as a safe haven.
Broad Asian indices reflected a cautious mood. Nikkei 225 futures fell 0.5% and Australia’s S&P/ASX 200 lost 0.2%, while S&P 500 futures dropped 0.3%. Euro Stoxx 50 futures also declined 0.1%, though Hang Seng futures added 0.3% and Japan’s Topix rose 0.3%.
The geopolitical risk is directly filtering through to India's currency dynamics. The rupee ended nearly flat on Friday but posted a weekly decline as investors grew cautious about oil-sensitive emerging market currencies. The new tensions sparked a modest pickup in importer hedging to guard against further depreciation.
Recent domestic buying activity highlights a resilient undercurrent ahead of the sell-off. On Friday, foreign portfolio investors were net buyers of Rs 2,603 crore, while domestic institutional investors added Rs 2,020 crore. This steady accumulation supports a technical view where strong support sits at 24,000 and immediate resistance is at 24,500.
Kaynes entered the futures and options ban period on Monday. The stock's open interest crossed 95% of the market-wide position limit, restricting new speculative positions. Meanwhile, India VIX dropped 8.3% to 12.25 on Friday, reflecting low implied volatility before the weekend strikes.
