Indian Markets Begin Week with Caution Ahead of US-Iran Diplomatic Developments

Domestic Markets Expected to Open on a Muted Note Amid Elevated Crude Oil Prices and Uncertainty Over US-Iran Ceasefire

The domestic markets are likely to open on a subdued note on Wednesday, with benchmark indices Sensex and Nifty expected to extend losses. The uncertainty surrounding the ceasefire between the United States and Iran, coupled with elevated crude oil prices, is likely to impact the market sentiment.

Nifty futures were trading at 23,890.5 at 8 am IST, indicating a subdued opening for the NSE Nifty 50, which had closed at 23,913.70 on Tuesday. The benchmark equity indices ended lower in volatile trade on Tuesday after crude oil prices surged following reports of fresh US military strikes in southern Iran.

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The Sensex declined 479.26 points or 0.63 percent to settle at 76,009.70. The Nifty dropped 118 points or 0.49 percent to close at 23,913.70, snapping a two-day rally. Iran on Tuesday alleged that the US had violated a ceasefire by carrying out strikes near the Strait of Hormuz, a development that could complicate efforts to end the three-month-long conflict.

In other regional developments, Israel carried out more than 120 air strikes in Lebanon on Tuesday, according to Lebanese security sources, marking one of the heaviest bombardments in recent weeks. Iran has sought an end to Israeli attacks in Lebanon as part of any settlement.

The rupee is also expected to weaken against the US dollar. Brent crude hovered near USD 99 per barrel, while Asian markets traded higher, with Japan's Nikkei touching a record high amid optimism around artificial intelligence-related stocks.

Foreign institutional investors sold equities worth Rs 2,408 crore on Tuesday. Overseas investors have sold shares worth about Rs 2.42 lakh crore so far this year, exceeding the record annual outflow seen in 2025.

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Among stocks in focus, Coal India will remain in the spotlight after the government announced plans to sell up to a 2 percent stake in the state-owned firm through an offer for sale at Rs 412 per share, nearly 10 percent lower than its previous closing price.