US-Iran war: After the end of three weeks of the US-Israel joint attack on Iran, US President Donald Trump dropped a hint to ‘wind down’ the military operation in the Middle East. The US President dropped a hint about this on his TruthSocial account on Friday. After this announcement, the US stock market witnessed strong value buying ahead of the market close.
The S&P 500 index finished at 6,506, after hitting an intraday low of 6,473. In this recovery from the intraday low, the US stock market benchmark index added around $900 billion to its market capitalisation. However, the S&P 500 index lost $1 trillion in market cap last week despite this recovery during the closing bell on Wall Street.
According to Indian stock market experts, the Asian and Indian markets are expected to open flat to gap up on Monday. They said the US President’s hint to wind down military operations in Iran is expected to lower crude oil prices, which will help the global economy lower import bills and reduce inflation risk. This would again trigger buzz about a US Fed rate cut, which would fuel gold and silver prices.
What does Trump’s message mean for the Indian stock market?
On how the US President’s message would impact the Indian stock market, Seema Srivastava, Senior Research Analyst at SMC Global Securities, said that a potential easing of the US-Iran conflict, hinted by Trump’s tweet, could drop crude oil prices, benefiting India’s economy. Lower oil prices would reduce India’s import bill, ease inflation, and support the Indian Rupee.
“Overall, a drop in crude oil prices could have a positive impact on India’s economy and markets,” Seema Srivastava said.
Oil and gas stocks to benefit
The SMC Global Securities expert, who is also a certified CA, said the energy and power sector could benefit, with companies like NTPC, Reliance Industries, and NHPC gaining from lower fuel costs. Oil and gas companies like Indian Oil Corporation might see reduced margins, while gas-focused companies like GAIL could benefit from increased demand. Capital goods companies like Larsen & Toubro might benefit from increased government infrastructure spending, and automobile companies like Maruti Suzuki and Tata Motors could see sales rise.
Seema Srivastava said that import-dependent sectors such as electronics and pharmaceuticals might benefit from lower input costs due to a stronger rupee.
Impact on gold and silver rates
On how the easing of the US-Iran war may impact gold and silver prices on Monday, Anuj Gupta, a SEBI-registered market expert, said that the easing of the US-Iran war is expected to fuel value buying in bullion, as the precious metals received a heavy beating last week. As the winding down of US military operations in Iran would bring down crude oil prices, central banks across the world would have a sigh of relief, as their challenge of counteracting inflation may become easier.
“Ease in the crude oil prices is expected to allay the inflation fear, leading to a sharp drop in the US Dollar rates, a situation that would be ideal for interest rate cuts,” said Anuj Gupta.
Outlook for gold and silver rates today
Anuj Gupta said the COMEX gold rate today is around $4,575/oz and we can expect it to touch $4,620 and $4,650, if there is no U-turn in the US President’s stance. He said the MCX gold rate today is around ₹1,45,000 per 10 gm, and it may go up to ₹1,50,000 and ₹1,55,000 if the uptrend continues throughout the day.
Stock market outlook
Sumeet Bagadia, Executive Director at Choice Broking, believes the Indian stock market’s undertone suggests profit booking at higher levels and a lack of sustained bullish momentum. The Choice Broking expert said the 23,000 to 22,950 is a solid support for the 50-stock index. Breaking below this support would mean further weakness in the Indian stock market.
Speaking on the outlook of the Nifty 50 index, Sumeet Bagadia said the 23,250–23,300 zone is now acting as immediate resistance, while a solid support base is forming in the 22,950–23,000 range. The daily RSI stands at 31.84, indicating near-oversold conditions that may hint at a potential short-term bounce but still reflect underlying weakness.
“The India VIX today remained nearly flat, rising marginally by 0.04% to 22.81, pointing to elevated volatility and persistent caution among market participants. In the derivatives segment, strong put writing at 23,000 and significant call writing at 23,300 suggest that the index is likely to remain range-bound between these levels in the near term. Traders are therefore advised to maintain a cautious approach,” said Bagadia.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
