The GIFT Nifty index, a futures contract based on the Nifty 50 index, is indicating a sharp decline for the benchmark when it opens later in the morning. Tensions in the Middle East have remained high as the Iran war entered its 20th day, with oil prices continuing their upward movement.
The GIFT Nifty was up 81 points at 23,290 as of 6:30 a.m. Thursday. The Nifty settled at 23,777 on Wednesday, up 0.8%. The difference suggests a nearly 500 points gap down open for the blue-chip gauge.
The immediate support level for the Nifty is seen at 23,600-23,650, while resistance is seen in the 23,900-23,950 range, according to Aakash Shah, technical research analyst at Choice Broking. The Relative Strength Index (RSI) stood at 37 and is gradually recovering from oversold levels.
The India VIX has cooled off toward 18.7, suggesting temporary relief, but volatility may persist amid global uncertainties, said Dhupesh Dhameja, derivatives research analyst at SAMCO Securities.
Overnight, the US Federal Reserve maintained its interest rate at 3.50%–3.75% in line with expectations. Chairman Jerome Powell stressed that if inflation does not "progress", there will be no rate cuts.
However, while the Fed's projections forecasted around two more rate cuts this year, he acknowledged that could change if inflation remains stubborn. "The rate forecast is conditional on the performance of the economy, so if we don't see that progress, then you won't see the rate cut," he said.
Gulf War, Oil Prices
Brent crude prices advanced as much as 4% to almost $112 a barrel, while the most-active contract for West Texas Intermediate was near $99.
Iran carried out an attack on a major LNG site in Qatar, one of several energy assets it pledged to target following strikes on the Islamic Republic's giant South Pars gas field. The attack on South Pars marked the first strike on the country's upstream facilities since the war began. While the US struck oil export hub Kharg Island late last week, it limited that attack to military targets.
In response to the attack, Iran's Islamic Revolutionary Guard Corps responded by publishing a list of Gulf energy sites in Saudi Arabia, the United Arab Emirates and Qatar. According to the IRGC, these locations have become direct and legitimate targets, the semi-official Tasnim news agency reported.
Oil prices have surged about 50% since the start of the war, putting pressure on Indian capital markets.
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