US-Iran Developments, Crude Oil Price Rally Top Key Market Movers over Weekend
Indian Stock Market Expected to Open Lower on Monday
The Indian stock market benchmark indices, Sensex and Nifty 50, are anticipated to open lower on Monday, following weakness in global markets as the US-Iran ceasefire talks failed and crude oil prices jumped, intensifying worries that the war in the Middle East will continue for longer than expected.
Asian markets traded lower on Monday, while the US stock futures dropped after the US announced to block the Strait of Hormuz, raising fears of a global energy crisis. The collapse of geopolitical negotiations has reintroduced fragility into the system, making the current rally vulnerable to reversal, according to Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth.
Key Global Market Cues for Sensex Today
| Market | Previous Close | Change |
|---|---|---|
| Japan's Nikkei 225 | - | -0.84% |
| Japan's Topix | - | -0.42% |
| South Korea's Kospi | - | -1.83% |
| South Korea's Kosdaq | - | -1.43% |
| Hong Kong Hang Seng index futures | - | Lower |
Asian markets traded lower on Monday amid a surge in crude oil prices. The Indian stock market ended sharply higher on Friday, with the benchmark indices rising more than 1% each. The Sensex jumped 918.60 points, or 1.20%, to close at 77,550.25, while the Nifty 50 settled 275.50 points, or 1.16%, higher at 24,050.60.
Gift Nifty was trading around 23,768 level, a discount of nearly 333 points from the Nifty futures' previous close, indicating a gap-down start for the Indian stock market indices. The US stock futures declined overnight, with Dow Jones Industrial Average futures tanking 517 points, or 1.1%, while S&P 500 futures dropped 1.1% and Nasdaq 100 futures slipped 1.2%.
US-Iran Ceasefire Talks and Strait of Hormuz Blockade
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The US-Iran talks in Pakistan ended without a deal due to "excessive demands" made by the American side, a top Iranian official said. US President Donald Trump has ordered a naval blockade of the Strait of Hormuz, escalating tensions with Iran after talks failed to resolve disputes over Tehran's nuclear ambitions. US forces will begin implementing the blockade, which applies only to vessels entering or departing Iranian ports, from 10 a.m. New York time Monday.
Global Economic Indicators
US consumer prices increased by the most in nearly four years in March, with the US Consumer Price Index (CPI) jumping 0.9% last month. In the 12 months through March, the CPI advanced 3.3% after rising 2.4% in February. Yields on Japan's benchmark government bonds (JGBs) hit a 29-year high, with the benchmark 10-year JGB yield rising 5.5 basis points to 2.490%.
Commodity Prices
Crude oil prices jumped as the US Navy prepared to block ships from reaching Iran via the Strait of Hormuz, after the US-Iran ceasefire talks failed to reach a deal to end the war. Brent crude futures jumped 7.05% to $101.91 a barrel, while US West Texas Intermediate was at $104.16 a barrel, up 7.86%. Gold prices fell to a near one-week low on Monday, pressured by a stronger dollar. Spot gold price fell 1.1% to $4,694.30 per ounce, its lowest level since April 7.
Investor Takeaway
Investors should be cautious and consider hedging their portfolios due to the potential for a global energy crisis.
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