The Indian stock market benchmark indices, Sensex and Nifty 50, are expected to open lower on Monday, following weakness in global markets as escalating US-Iran war in the Middle East fuelled crude oil prices higher and dampened risk-appetite.
Asian markets slipped, while the US stock market ended lower last week, with all three Wall Street indices declining over 1% each.
On Friday, the Indian stock market ended lower on profit booking amid a sharp jump in crude oil prices and weakness in rupee.
The Sensex declined 160.73 points, or 0.21%, to close at 75,237.99, while the Nifty 50 settled 46.10 points, or 0.19%, lower at 23,643.50.
“Traders should avoid aggressive leverage and maintain strict risk management practices. With volatility expected to remain elevated, adopting a hedged and stock-specific strategy while prioritizing capital preservation will remain crucial until greater clarity emerges on geopolitical developments and commodity price trends,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.
Here are key global market cues for Sensex today:
Asian Markets
Asian markets traded lower on Monday amid renewed geopolitical tensions in the Middle East as fresh drone attacks in the Gulf pushed up oil prices and bond yields. Japan’s Nikkei declined 1.01%, while the Topix fell 0.88%. South Korea’s Kospi dropped 1.31% and Kosdaq fell more than 2%. Hong Kong’s Hang Seng index futures indicated a lower opening.
Gift Nifty Today
Gift Nifty was trading around 23,567 level, a discount of nearly 76 points from the Nifty futures’ previous close, indicating a negative start for the Indian stock market indices.
Wall Street
US stock market ended sharply lower on Friday amid spiking crude prices and rising Treasury yields.
The Dow Jones Industrial Average declined 537.29 points, or 1.07%, to 49,526.17, while the S&P 500 plunged 92.74 points, or 1.24%, to 7,408.50. The Nasdaq Composite closed 410.08 points, or 1.54%, lower at 26,225.15.
Nvidia stock price fell 4.4%, AMD shares declined 5.7%, Intel dropped 6.2%, Microsoft shares gained 3.05%, Apple stock price rose 0.68%, Tesla stock price tanked 4.75%, and Ford shares dropped 7.5%.
US-Iran War
The US and Iran remained far apart on a deal to end the war and reopen the Strait of Hormuz after a drone strike caused a fire at a nuclear power plant in the United Arab Emirates, while Saudi Arabia reported intercepting three drones. US President Donald Trump also warned that Iran must act “fast” to reach a deal.
Trump-Xi Meeting
The US and China have agreed to set up boards on trade and investment and build a constructive relationship of strategic stability based on fairness and reciprocity, according to a fact sheet by the White House on President Donald Trump’s visit to Beijing.
US Treasury Yields
The US treasury yields spiked to near their highest in a year. The yields on benchmark US 10-year notes and the two-year notes, which typically move in step with interest rate expectations for the Federal Reserve, were last at 4.607% and 4.085%, respectively.
Japanese Bond Yields
Japanese government bond (JGB) yields surged on Monday, with the benchmark 10-year yield reaching levels last seen in October 1996. The yield on the 10-year JGB climbed 7.5 bps to 2.775%. The yield on the five-year note added 3.5 bps to 2.020%, and the yield on the 20-year JGB advanced 9.5 bps to 3.735%.
Crude Oil Prices
Crude oil prices jumped on fresh escalation in the US-Iran war. Brent crude oil price spiked 2.33% to $111.81 a barrel, while the US West Texas Intermediate (WTI) crude futures rallied 2.79% to $108.36.
Gold Rate Today
Gold prices fell to their lowest point in more than a month. Spot gold price declined 1.1% to $4,488.99 per ounce, while US gold futures for June delivery lost 1.5% to $4,493.30. Spot silver price fell 2.2% to $74.30 per ounce,
Dollar
The dollar firmed against most major currencies. The dollar index, which measures the greenback against a basket of major currencies, was a touch firmer at 99.393. The euro was last at $1.1609 and sterling fetched $1.3305, both down more than 0.1%, Reuters reported. Against the yen, the dollar traded at 158.84, up 0.04% and the offshore yuan traded at 6.8163 yuan per dollar.
(With inputs from Agencies)
