Nifty Falls Amid Global Market Turmoil, US-Iran Tensions Weigh on Sentiment

Indian Equity Indices Expected to Open on a Subdued Note

The Indian stock market, led by the Sensex and Nifty, is likely to open on a subdued note on Tuesday after Monday's sharp rally. This is due to renewed military action in Iran and a rebound in crude oil prices weighing on sentiment. Despite broadly positive Asian markets and improving institutional flows, the market is expected to trade cautiously.

The Nifty is currently trading at 24,040, down 87 points or 0.36 percent from Nifty futures' previous close. This indicates a mildly negative start for the benchmark Indian equity indices. On Monday, the Nifty surged 312 points or 1.32 percent to reclaim the 24,000 mark and close at 24,031.70. The Sensex also rallied 1,073.61 points or 1.42 percent to end at 76,488.96, helped by a sharp fall in crude oil prices, gains in the rupee, and optimism surrounding a potential US-Iran agreement.

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Global cues were mixed on Tuesday morning. Asian equities remained resilient, with the MSCI Asia Pacific Index rising 0.5 percent, led by gains in South Korea after markets reopened following a holiday. S&P 500 futures were also up 0.6 percent, although investor enthusiasm cooled after reports that the US military carried out strikes on targets in southern Iran, raising fresh doubts over the pace of diplomatic progress in the region.

US cash markets remained shut overnight for the Memorial Day holiday, leaving investors focused on geopolitical developments and commodity markets. Crude oil prices rebounded after Monday's steep selloff, with Brent crude futures rising nearly 1.5 percent to $97.56 per barrel in early Asian trade. U.S. WTI crude traded around $91.25 a barrel.

Foreign institutional investors turned net buyers on Monday after four consecutive sessions of selling, purchasing equities worth Rs 821 crore. Domestic institutional investors extended their buying streak, investing Rs 3,856 crore and continuing to provide support to the market.

Market Analyst Ponmudi R of Enrich Money stated that the sentiment remains cautiously constructive as softer crude prices, a stabilising rupee, and improving diplomatic signals have strengthened risk appetite. He noted that crude has corrected sharply from recent highs and the rupee has recovered towards the 95.2 level, easing concerns around inflation, import costs, and broader macroeconomic stability.

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On the technical front, Ponmudi said that the Nifty has improved its near-term structure after decisively reclaiming the 24,000 mark. Sustained trading above this level could open the path towards the 24,200-24,400 zone, while 23,800 remains an important support area. For Bank Nifty, resistance is seen near 55,400 and then 55,800-56,000, while support is placed around 54,700-54,600.