The Indian stock market is likely to open flat to slightly higher on Monday, January 12, as it tracks overnight gains across Asian markets and developments in the ongoing US-Iran conflict.

Early global cues offer modest support. GIFT Nifty signals a neutral start, while major Asian markets have opened higher, led by strong gains in Japan’s Nikkei and South Korea’s Kospi. Despite the positive regional momentum, Indian markets may trade with caution as persistent trade and tariff-related uncertainties continue to weigh on sentiment, keeping investors selective.

However, on Friday, the Sensex and Nifty 50 extended their losing streak to a fifth straight session, closing in the red amid renewed worries over US tariffs, cautious positioning ahead of the Q3 earnings season, and sustained foreign fund outflows.

Domestic Market Recap

On Friday, Indian indices closed in the red:

• Sensex slumped by 605 points (0.72%) to close at 83,576.24
• Nifty 50 moved down by 194 points (0.75%) to settle at 25,683

Gift Nifty

Gift Nifty was trading near 25,809, around 7 points lower than the previous Nifty futures close, hinting at a muted start for Indian markets.

Overnight Wall Street Performance

On Friday, the S&P 500 climbed 0.65% to close at a record 6,966.28, after hitting a new all-time intraday high during the session.

• The Dow Jones Industrial Average soared by 237 points (0.48%) to close at 49,504.07.
• S&P 500 up by 44.82 points (0.65%), ending at 6,966.28.
• The Nasdaq Composite was higher by 191 points (0.81%), finishing at 23,671.35.

Gold Prices

• Spot gold was trading 1.55% higher at $4,579.06 per ounce.
• The US gold futures were higher by 1.98% at $4,589.89.

Crude Oil Prices

• Brent crude soared by 0.30% to $63.53/barrel
• US West Texas Intermediate (WTI) crude was trading 0.59% higher at $59.30/barrel

Overnight Major Global Events Driving Sentiment

1. US–Iran conflict: President Donald Trump weighed multiple options against Iran after its security forces launched a harsh crackdown on protesters that human rights groups say has killed over 500 people. Trump warned that the US could respond if Iranian authorities were responsible for killing demonstrators opposing the country’s theocratic rule, even as protests entered a second week despite an intensified crackdown. Iran, in turn, warned on Sunday that it would consider US and Israeli military bases in the region as “legitimate targets” if any military action occurs.
2. Uncertainty over the India–US trade deal: Investors also remained cautious as uncertainty persisted around a US Supreme Court ruling on President Trump’s trade tariffs. Markets had expected a decision last week, but the delay unsettled sentiment. Analysts said the lack of an India–US trade deal, elevated geopolitical risks, and sustained foreign fund outflows continue to dampen expectations for the December-quarter earnings season.
3. Geopolitical tensions: Rising geopolitical risks further pressured markets after protests in Iran heightened concerns about regional instability. President Trump said he was evaluating various options on Iran and reiterated earlier comments on Greenland and the NATO alliance.
4. Concerns over Fed independence: Uncertainty also clouded the outlook for the US Federal Reserve as reports highlighted tensions between President Trump and Fed Chair Jerome Powell, including a criminal investigation into Powell by US prosecutors. This development overshadowed the latest US jobs data and kept investors cautious ahead of the January 27–28 FOMC meeting, which could also shape the RBI’s policy stance in early February.

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