The Indian stock market benchmark indices, BSE Sensex and Nifty 50, are likely to open lower on Wednesday as escalating tensions in the US–Iran conflict continue to dampen investor risk appetite and weigh on overnight global sentiment.

Asian markets traded lower, while the US stock market ended mostly in the red overnight as hopes for a ceasefire in the Middle East weakened.

However, on Tuesday, the Indian stock market snapped its two-session losing streak and closed higher, supported by improved global sentiment following a temporary pause in hostilities between the US and Iran.

Domestic Market Recap

On Tuesday, Indian indices green:

• Sensex gained by 394.50 points (0.54%) to close at 73,918.76
• Nifty 50 moved up by 119.10 points (0.52%) to settle at 23,242.10

Gift Nifty

Gift Nifty was trading near 23,272, around 59 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 lower on Tuesday as the escalation of the US–Iran conflict heightened geopolitical uncertainty and weakened expectations of a ceasefire in the Middle East, prompting investors to reduce risk exposure.

• The Dow Jones Industrial Average gained by 86.10 points (0.17%) to close at 50,872.11.
• S&P 500 was down by 19.08 points (0.26%), ending at 7,386.65.
• The Nasdaq Composite was lower by 250.84 points (0.97%), finishing at 25,678.82.

Crude Oil Prices

Crude oil prices surged after the US military launched fresh strikes on Iran, heightening concerns over supply disruptions in the Middle East. Prices also gained support from market data showing another significant drawdown in US crude inventories, signalling tighter supply conditions.

• Brent crude soared by 0.90% to $92.29/barrel
• US West Texas Intermediate (WTI) crude was trading 0.80% lower at $88.97/barrel

Overnight Major Global Events Driving Sentiment

1. US–Iran War: Iran’s Islamic Revolutionary Guard Corps said it had launched drone attacks on the US Fifth Fleet in Bahrain in response to recent US strikes in southern Iran, according to Reuters citing state media. Meanwhile, the US Central Command said it had carried out strikes on Iranian air defence systems, ground control stations, and surveillance radar sites near the Strait of Hormuz after Iran allegedly shot down a US helicopter.
2. Japanese Bond Yields: Japanese government bond (JGB) yields moved higher amid growing inflation concerns. The benchmark 10-year JGB yield rose 3 basis points to 2.695%, while the 20-year yield gained 3 basis points to 3.590%. The 30-year yield climbed 2.5 basis points to 3.890%, while the 40-year yield remained unchanged. Among shorter maturities, the two-year yield edged up 0.5 basis point to 1.420%, and the five-year yield increased 1.5 basis points to 1.940%.

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