Gift Nifty futures plunged around 2% on Thursday, 278 May following a fresh escalation in the ongoing conflict between the United States and Iran. This indicates that Indian stock markets are likely to witness a sharply negative start on Friday, 29 May. Indian stock markets are closed today on account of Bakri Id.
Rising geopolitical tensions, surging crude oil prices, and weakness across Asian markets have significantly dented investor sentiment globally.
Gift Nifty 50 futures tumbled around 2% to 23,580, indicating a strong gap-down opening for benchmark indices when domestic trading resumes on Friday.
What led to this decline?
The decline came after fresh US military strikes on an Iranian military site overnight heightened concerns around the three-month-long conflict, even as diplomatic talks between Washington and Tehran continued.
In response, Iran’s Revolutionary Guards, the country struck a US airbase at around 4:50 a.m. local time, as reported by Iran’s semi-official Tasnim news agency. However, the group did not disclose the exact location of the targeted base.
At the same time, Kuwait, a major US ally in the Gulf region, reported missile and drone attacks, adding to fears that the conflict may be expanding across the Middle East.
US officials said Central Command forces intercepted and destroyed four Iranian one-way attack drones near the Strait of Hormuz after they were deemed a threat to commercial shipping and US military assets. The US military also carried out strikes on an Iranian ground control station in Bandar Abbas that was reportedly preparing to launch another drone.
The escalation follows recent US “self-defense strikes” in southern Iran targeting vessels allegedly attempting to deploy naval mines and missile launch sites. According to US Central Command, those operations were aimed at protecting American troops and ensuring the safety of commercial shipping routes in the region.
The geopolitical escalation immediately triggered a sharp rally in oil prices. Brent crude, the global benchmark, surged more than 3% to $97.29 per barrel, while US West Texas Intermediate crude rose 3.42% to $91.71 per barrel.
Asian equity markets also came under pressure amid the rising uncertainty. Hong Kong’s Hang Seng index fell 1.42%, South Korea’s KOSPI declined 1.01%, and Japan’s Nikkei 225 slipped 0.62% in Thursday’s trade.
Indian Markets on Wendesday
Indian benchmark indices had already ended lower in the previous trading session amid concerns over Iran-US tensions and weakness in the rupee, although broader markets showed relative resilience.
On Wednesday, the Sensex declined 142 points to close at 75,868, while the Nifty 50 slipped 7 points to settle at 23,907. Despite the weak closing, India VIX — the market’s volatility indicator — fell 6% to 15.24, indicating that panic levels remained relatively contained.
Indian markets remained closed on May 28 as both the National Stock Exchange and BSE observed a trading holiday on account of Bakri Id. Earlier in the month, exchanges were also shut on May 1 for Maharashtra Day.
Technical Triggers
Despite the near-term volatility, technical analysts continue to maintain a cautiously positive stance on the market structure.
According to Bajaj Broking, “Nifty’s daily chart shows the formation of a small bullish candlestick pattern with shadows in either direction signaling consolidation amid stock specific action. Index is seen sustaining above the 20 days EMA.”
The brokerage further noted that the Nifty had recently broken above the 23,200–23,850 trading range seen over the previous nine sessions. It believes that if the index manages to sustain above Monday’s gap zone of 23,835–23,922, the overall bias could remain positive.
Bajaj Broking added that sustaining above those levels may open the door for a further upside move towards the 24,200–24,300 range in the coming sessions, which coincides with the trendline resistance connecting the highs of April and May 2026.
For investors, the immediate focus will now remain on global developments around the Middle East conflict, crude oil prices, foreign fund flows, and whether rising geopolitical uncertainty leads to sustained pressure on global equity markets.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
