The Indian stock market benchmark indices, BSE Sensex and Nifty 50, are likely to open on a cautious note on Thursday as weak overnight global market cues, escalating tensions in the US–Iran conflict, and rising crude oil prices fuel concerns about higher inflation.

Asian markets traded lower, while the US stock market closed in the red, dragged down by a sharp selloff in chipmaker stocks.

However, on Wednesday, the Indian stock market delivered a mixed performance, with the benchmark indices giving up a significant portion of their intraday gains before closing well below the day’s highs.

Domestic Market Recap

On Wednesday, Indian indices ended on a mix note:

• Sensex gained by 64.42 points (0.09 %) to close at 73,983.18
• Nifty 50 moved down by 27.15 points (0.12%) to settle at 23,214.95

Gift Nifty

Gift Nifty was trading near 23,198, around 42 points lower than the previous Nifty futures close, hinting at a negative start for Indian markets.

Overnight Wall Street Performance

The US stock market closed sharply lower on Wednesday as renewed tensions between the United States and Iran heightened geopolitical uncertainty, while continued selling in semiconductor stocks added further pressure on Wall Street. Chipmakers extended their recent decline, weighing heavily on major indices and dampening investor sentiment.

• The Dow Jones Industrial Average crashed by 953.33 points (1.87%) to close at 49,918.78.
• S&P 500 was down by 119.66 points (1.62%), ending at 7,266.99.
• The Nasdaq Composite was lower by 509.32 points (1.98%), finishing at 25,169.50.

Crude Oil Prices

Crude oil prices surged after Iran announced the closure of the Strait of Hormuz following fresh US military strikes on Iranian targets.

• Brent crude soared by 2.47% to $95.40/barrel
• US West Texas Intermediate (WTI) crude was trading 2.89% lower at $92.63/barrel

Overnight Major Global Events Driving Sentiment

1. US–Iran War: The United States launched a fresh wave of strikes against Iran, escalating tensions in the region. In response, Tehran warned that it would target any vessel passing through the Strait of Hormuz. Iranian media reported explosions across southern Iran near the strategic waterway, where US forces had previously struck air defence systems, radar installations, and other military sites.
2. US Inflation: US consumer inflation accelerated to its fastest pace in three years in May. The Consumer Price Index (CPI) rose 4.2% year-on-year, marking the biggest increase since April 2023. Inflation had stood at 3.8% in April and 3.3% in March. On a monthly basis, consumer prices increased 0.5% in May after rising 0.6% in April.
3. US Treasury Yields: US Treasury yields moved higher as persistent inflation reinforced expectations of elevated interest rates. The benchmark 10-year Treasury yield climbed 2 basis points to 4.548%, while the 30-year bond yield rose 1.7 basis points to 5.0282%. The two-year Treasury yield also advanced 1.5 basis points to 4.139%.

Discover the next big investment! Tradz by EquityPandits’ IPO screener helps you identify promising initial public offerings. Download Tradz by EquityPandit and get ahead of the curve! Sign Up Now & Find Your Next IPO Gem!