Indian markets succumbed to geopolitical concerns on Monday as indices remained under pressure throughout the session. Analysts said weakness was on account of the Iranian attack on Israel, persistent concerns over higher-for-longer US interest rates.

“We expect domestic markets to witness near-term headwinds amid rising volatility. With the start of result season and poll promises by several political parties, we may continue to see sector & stock-specific action,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal.

Here’s breaking down the pre-market actions:

GIFT Nifty (Earlier SGX Nifty) signals a negative start
GIFT Nifty on the NSE IX traded lower by 165.5 points, or 0.74 per cent, at 22,188, signaling that Dalal Street was headed for negative start on Tuesday.

  • Tech View: On the daily charts, we can observe that Nifty is in the process of retracing the rise it has witnessed from 22710 – 22776. The key 50 and 61.82% Fibonacci retracement levels are placed at 22240 – 22117. Thus, in case of a bounce towards 22350 – 22370 it should be used as a selling opportunity, said Jatin Gedia of Sharekhan.
  • India VIX: India VIX, which is a measure of the fear in the markets, rose 8.5% to settle at 12.47 levels.

US stocks down
US stocks closed sharply lower on Monday, as an early lift from a strong retail sales report succumbed to a jump in Treasury yields and concerns about rising geopolitical tensions between Iran and Israel.

  • Dow down 0.65%,
  • S&P 500 dips 1.2%,
  • Nasdaq falls 1.79%

Asian shares decline
Asian stocks declined, tracking Wall Street shares lower, after the latest evidence of stubborn US inflation spurred bets the Federal Reserve will be in no rush to cut rates.

  • S&P 500 futures were little changed as of 9:15 a.m. Tokyo time
  • Hang Seng futures fell 1%
  • Japan’s Topix fell 1%
  • Australia’s S&P/ASX 200 fell 0.9%
  • Euro Stoxx 50 futures rose 0.7%

Oil rises
Oil prices rose on Tuesday amid heightened tensions in the Middle East after Israel’s military chief said his country would respond to Iran’s weekend missile and drone attack amid calls for restraint by allies.

Dollar firm
The dollar stood just off its highest since early November against a handful of peer currencies on Tuesday, raising intervention worries as the yen languished at its lowest level since 1990 following hotter-than-expected U.S. retail sales.

FII/DII action
Foreign portfolio investors were net sellers at Rs 3,268 crore for the second straight day. DIIs, meanwhile, bought shares worth Rs 4,762 crore.

The rupee declined 6 paise to settle at 83.44 against the US dollar on Monday, in line with deep losses in equity markets and an elevated dollar against major rivals overseas amid geopolitical tensions.

FII data
The net long of FIIs turned from Rs 33448 crore on Friday.to net short of Rs 5,007 crore on Monday

Q4 results
Crisil, SG Mart, Den Networks among others will announce their fourth quarter earnings on Tuesday.


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