Stocks Muted After US Strikes Iran; Rupee Gains, Experts Bullish
Indian markets open cautiously after US strikes in Iran, rupee strengthens.
Top Summary
- What happened: Indian equity markets opened in the red following US strikes on Iran, although the rupee strengthened.
- Why it matters: Geopolitical tensions are impacting investor sentiment, creating uncertainty in the market.
- What changes for people: Investors should be cautious of short-term volatility and monitor global events.
- Who is affected: Traders and investors in the Indian stock market are directly affected by these fluctuations.
Market Opening and Initial Trends
Indian equity benchmarks opened lower on Tuesday. The Sensex was down over 130 points, and the Nifty fell over 30 points at the open.
This follows a two-week high achieved just the day before. Fresh US strikes in the Middle East have rattled investors.
The rupee, however, opened 15 paise stronger at 95.38 a dollar.
Expert Views on Market Performance
Rajesh Palviya, Head of Research at Axis Direct, noted that the Nifty 50 closed at 24,031.70 on Monday, gaining nearly 310 points (+1.32%). It held above the 24,000 mark for the second session.
"Technically, the undertone has turned decisively bullish after Nifty reclaimed and sustained above the key 23,850 resistance zone on a closing basis,"
Palviya stated.
He added that as long as Nifty sustains above 24,000, it could advance towards 24,150-24,350. Immediate support is at 23,850, with stronger support around 23,650.
Banking and Global Cues
Banking stocks led the rally, driven by short covering. Easing crude oil prices, a stronger rupee, and improving global risk appetite also contributed.
While US markets were closed for Memorial Day, Wall Street indices ended Friday's session near record highs. Gold and silver remained firm, and Brent crude recovered after Monday's decline.
GIFT Nifty is hovering near 24,070, indicating a steady-to-positive start for domestic equities.
Cryptocurrency Market Update
WazirX Market's Desk reported that Bitcoin traded near $76,546. Ethereum traded around $2,087, with weak short-term signals.
The SEC approved Nasdaq's proposal for cash-settled Bitcoin index options. Reports also highlighted a crypto-backed mortgage framework potentially using Bitcoin as collateral.
Morgan Stanley projected that U.S. tech firms could spend nearly $800 billion on AI infrastructure by 2026.
Overall Market Capitalization
The total market cap of all BSE Sensex companies closed at Rs 4,68,33,375 crore on Monday.
Ethereum Technical Analysis
Harish Vatnani, Head of Trade at ZebPay, noted that Ethereum is trading around $2,110. It continues to respect an ascending support trendline from February lows near $1,780.
The price failed to sustain momentum above the $2,350-$2,400 resistance zone and has pulled back toward mid-range support levels. The market structure remains constructive with maintained higher lows.
What to Watch Next
Investors should closely monitor geopolitical developments and their impact on oil prices and market sentiment. Keep an eye on key support and resistance levels for both Nifty and Bank Nifty to gauge potential market movements.