Nifty Slumps 2% as US-Iran Tensions Escalate, Fears of Gap-Down Opening in Indian Markets

Global Markets Plummet Amid Escalating Iran-US Conflict

Indian stock markets are bracing for a sharply negative start on Friday, May 29, after Gift Nifty futures plunged around 2% on Thursday, May 28. The decline follows a fresh escalation in the ongoing conflict between the United States and Iran, which has significantly dented investor sentiment globally.

Rising geopolitical tensions, surging crude oil prices, and weakness across Asian markets have contributed to the sharp decline. 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.

The decline in Gift Nifty 50 futures was triggered by fresh US military strikes on an Iranian military site overnight, which heightened concerns around the three-month-long conflict. Diplomatic talks between Washington and Tehran continued, but the escalation led to a sharp rally in oil prices.

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| Oil Price Comparison (Thursday, May 28) | | --- | --- | | Brent Crude | $97.29 per barrel (up 3%) | | US West Texas Intermediate Crude | $91.71 per barrel (up 3.42%) |

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 benchmark indices had already ended lower in the previous trading session amid concerns over Iran-US tensions and weakness in the rupee. 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.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Technical analysts continue to maintain a cautiously positive stance on the market structure. According to Bajaj Broking, the Nifty's daily chart shows the formation of a small bullish candlestick pattern with shadows in either direction signaling consolidation amid stock-specific action. The brokerage believes that if the index manages to sustain above Monday's gap zone of 23,835-23,922, the overall bias could remain positive.

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.