Pre-Market Update: Sensex, Nifty 50 Likely To Open Lower On May 12; Gift Nifty Signals 182-Point Gap-Down Amid U.S.-Iran Tensions

Pre-Market Update at 7:40 AM: Indian stock market benchmark indices, the BSE Sensex and Nifty 50, are likely to open lower on Tuesday, May 12, amid rising concerns over the ongoing U.S.-Iran conflict and its potential impact on India’s economy and inflation outlook.

Gift Nifty hovered around the 23,653 mark, trading at a discount of nearly 182 points to the previous close of Nifty futures, indicating a weak start for domestic equities. While Asian markets traded higher, Wall Street ended with modest gains overnight, supported by continued optimism around artificial intelligence (AI)-driven technology stocks.

Geopolitical tensions remained elevated after U.S. President Donald Trump said the ceasefire between the U.S. and Iran was on “massive life support” and at its weakest point after rejecting Tehran’s latest proposal to end the conflict. At the same time, Iranian Parliament Speaker Mohammad-Bagher Ghalibaf stated that there was no alternative but to accept the proposed 14-point framework aimed at easing tensions.

Prime Minister Narendra Modi renewed his appeal for austerity measures as disruptions linked to the U.S.-Iran conflict continue to impact global markets. He urged citizens to support economic restraint efforts and suggested schools consider temporary online classes wherever feasible.

Japan’s 10-year government bond yield climbed to a 29-year high ahead of a debt auction. The 10-year Japanese Government Bond (JGB) yield rose 2 basis points to 2.540 per cent, its highest level since June 1997. Meanwhile, the 30-year yield edged up to 3.78 per cent, while the 40-year yield advanced to 4.035 per cent, reflecting continued pressure in global bond markets.

India currently has around 60 days of crude oil and natural gas reserves, the central government said during the 5th Informal Group of Ministers meeting chaired by Defence Minister Rajnath Singh to review the country’s energy supply situation amid the Middle East conflict.

Crude oil prices continued to rise as fragile negotiations between the U.S. and Iran kept supply concerns elevated. Brent crude futures gained 0.29 per cent to USD 104.51 per barrel, while U.S. West Texas Intermediate (WTI) crude rose 0.32 per cent to USD 98.38 per barrel after both benchmarks rallied nearly 2.8 per cent in the previous session.

The U.S. dollar remained steady as talks to end the Middle East conflict showed little progress. The dollar index stood at 97.98.

From a derivatives perspective, the Put-Call Ratio (PCR) stands at 0.56. On the Put (PE) side, significant open interest among the nearest strikes is concentrated at 23,000 followed by 23,500, suggesting these levels are likely to act as immediate support zones for the Nifty 50. On the Call (CE) side, major open interest addition during the previous trading session was seen at the 24,000 strike, indicating strong resistance at that level. In the near out-of-the-money strikes, high open interest is also concentrated at 24,500.

The Nifty 50 is currently hovering near a crucial support zone of 23,780–23,800, which is expected to act as a key make-or-break range in the near term. A decisive breakdown below this zone could trigger further weakness towards 23,689, which coincides with the 38.2 per cent Fibonacci retracement level. The next major support is placed near 23,405, aligning with the 50 per cent Fibonacci retracement and a previous gap area. On the upside, the index faces immediate resistance at its 50-day moving average (DMA) placed at 23,959. A sustained move above this level could pave the way for a recovery towards the 20-DMA near 24,156.

Several companies are scheduled to announce their quarterly earnings on May 12, including Dr. Reddy's Laboratories, Tata Power Company, Berger Paints India, Dixon Technologies (India), INOX India, Max Financial Services, One Mobikwik Systems, Nazara Technologies, Pfizer, Torrent Power, and V-Guard Industries among others.

For Tuesday’s session, Steel Authority of India Limited (SAIL) remains under the F&O ban list.

Foreign Institutional Investors (FIIs) remained net sellers on May 12, offloading equities worth Rs 8,437.56 crore. Domestic Institutional Investors (DIIs), however, purchased shares worth Rs 5,939.65 crore during the session.

On Monday, Indian benchmark indices ended sharply lower for the third consecutive session amid broad-based selling pressure. The Sensex plunged 1,312.91 points, or 1.70 per cent, to close at 76,015.28, while the Nifty 50 declined 360.30 points, or 1.49 per cent, to settle at 23,815.85.

U.S. markets ended marginally higher on Monday, supported by continued optimism surrounding AI-related technology stocks. The Dow Jones Industrial Average gained 95.31 points, or 0.19 per cent, to close at 49,704.47. The S&P 500 rose 13.91 points, or 0.19 per cent, to 7,412.84, while the Nasdaq Composite advanced 27.05 points, or 0.10 per cent, to settle at 26,274.13.

Among major technology stocks, NVIDIA climbed 1.96 per cent, Advanced Micro Devices rose 0.79 per cent, Intel jumped 3.64 per cent, and Qualcomm surged 8.4 per cent. Meanwhile, Tesla rallied 3.91 per cent, while Apple slipped 0.20 per cent, Microsoft fell 0.58 per cent, and Amazon declined 1.35 per cent.

Gold prices moved higher as investors closely monitored developments related to the U.S.-Iran conflict in the Middle East. Spot gold prices rose 0.5 per cent to USD 4,757.59 per ounce, while spot silver prices gained 0.2 per cent to USD 86.27 per ounce.

Disclaimer: The article is for informational purposes only and not investment advice.

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