Sensex, Nifty 50 Likely to See Weak Start Due to U.S.-Iran Tensions and Weak Global Cues

Pre-Market Update at 7:34 AM: The Indian benchmark indices, Sensex and Nifty 50, are likely to open on a weak note on Tuesday, May 5, tracking negative global cues as rising tensions in the U.S.–Iran conflict weighed on investor sentiment. Gift Nifty hovered around the 24,038 mark, trading at a discount of about 30 points compared to the previous close of Nifty futures, signalling a likely negative start for domestic markets. Asian markets traded in the red, while U.S. markets ended lower overnight, with the S&P 500 pulling back from its record highs.

Escalating tensions in the U.S.–Iran conflict remain a major overhang for global markets. Both nations exchanged fire on Monday, drawing in the United Arab Emirates and raising concerns about further strikes on Iranian targets. The U.S. military reported destroying six Iranian boats and intercepting multiple cruise missiles and drones, as Iran attempted to disrupt efforts to reopen shipping routes through the Strait of Hormuz.

On the domestic political front, assembly election results are in focus. The BJP is poised to form governments with strong majorities in West Bengal and Assam. In Kerala, the Congress-led UDF secured a decisive win, while in Tamil Nadu, Vijay’s TVK claimed 107 seats, pushing the ruling DMK, led by CM Stalin, to third place.

Crude oil prices cooled slightly after a sharp rally. Brent crude for July fell 0.6 per cent to USD 113.76 per barrel, while U.S. WTI crude declined 1.5 per cent to USD 104.83, following strong gains in the previous session. Meanwhile, the U.S. dollar index held steady at 98.452 after a 0.3 per cent rise earlier.

From a derivatives perspective, the Put-Call Ratio (PCR) stands at 0.61. On the Put (PE) side, significant open interest is concentrated at 24,000 and 23,500 strikes, indicating strong support levels. On the Call (CE) side, notable open interest addition was seen at 24,200 and 24,600 strikes, suggesting resistance. Additionally, high open interest is concentrated at 24,300 and 24,500 levels.

Nifty 50 continues to trade within a well-defined range. Immediate resistance is seen at 24,335; a sustained move above this level could push the index towards 24,602, and further towards 24,750. On the downside, strong support is placed near 23,951 (20-DMA), below which the index may drift towards 23,790. Overall, Nifty 50 is trading in a broader range of 23,800–24,300, with a breakout on either side potentially leading to a directional move of 150–200 points.

Larsen & Toubro, Mahindra & Mahindra, Hero MotoCorp, Coforge, United Breweries, Ajanta Pharma, Aavas Financiers, Dalmia Bharat Sugar, Voltamp Transformers, and Poonawalla Fincorp are scheduled to announce their results on May 5.

There are no stocks under the F&O ban for May 5.

On May 4, Foreign Institutional Investors (FIIs) were net buyers, purchasing equities worth Rs 2,835.62 crore, while Domestic Institutional Investors (DIIs) also bought shares worth Rs 4,764.16 crore.

On Monday, Indian markets pared early gains due to profit booking but ended higher. The Sensex gained 355.90 points, or 0.46 per cent, to close at 77,269.40, while the Nifty 50 rose 121.75 points, or 0.51 per cent, to settle at 24,119.30.

U.S. markets closed lower on Monday as geopolitical tensions overshadowed strong earnings optimism. The Dow Jones Industrial Average fell 1.13 per cent to 48,941.90, while the S&P 500 declined 0.41 per cent to 7,200.75. The Nasdaq slipped 0.19 per cent to 25,067.80. Among key stocks, Nvidia rose 0.04 per cent, AMD declined 5.27 per cent, and Intel fell 3.84 per cent. Microsoft ended marginally lower, Apple dropped 1.21 per cent, and Amazon gained 1.36 per cent. Tesla rose 0.45 per cent. GameStop plunged 10 per cent, while eBay advanced करीब 5 per cent. FedEx declined 9.1 per cent, United Parcel Service fell 10.5 per cent, Palantir gained 1.4 per cent, and Norwegian slipped 8.6 per cent.

Gold prices remained largely steady amid geopolitical tensions and inflation concerns. Spot gold rose 0.2 per cent to USD 4,528.99 per ounce, while spot silver gained 0.1 per cent to USD 72.76 per ounce.

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

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