GIFT Nifty Hints at Weak Start; Kospi Drops 3%, Brent Above $90

Indian equity benchmarks are set for a weak start on Monday, with GIFT Nifty trading sharply lower in early signals. The negative cue comes amid a broad sell-off in Asian markets and a spike in crude oil prices triggered by escalating geopolitical tensions between the United States and Iran.

Asian Markets Under Pressure

South Korea's Kospi index led losses in the region, plunging 3% in early trade. Japan's Nikkei 225 and Hong Kong's Hang Seng also traded in the red, tracking overnight weakness on Wall Street and fresh concerns over stability in the Middle East.

Investors turned risk-averse after reports suggested a potential confrontation in the Strait of Hormuz, a critical chokepoint for global oil shipments. The development rattled sentiment across emerging markets.

Brent Crude Crosses $90 Mark

Brent crude futures surged past the $90 per barrel level for the first time in weeks. The spike was driven by fears of supply disruptions if the US-Iran standoff escalates further. Analysts have warned that sustained high oil prices could reignite inflationary pressures and complicate monetary policy decisions for central banks, including the Reserve Bank of India.

India imports over 80% of its crude oil requirements, making it particularly vulnerable to price shocks. A sustained rise in oil prices could widen the country's trade deficit and put pressure on the rupee.

What It Means for Dalal Street

The GIFT Nifty, which trades on the International Exchange near Ahmedabad, is a leading indicator of how the Indian market will open. Its current levels suggest the Nifty 50 could open with a gap-down of over 100 points. Traders are bracing for volatility, with the VIX — India's fear gauge — expected to rise.

Sectors such as aviation, paints, and FMCG, which are sensitive to crude oil prices, are likely to face selling pressure. Meanwhile, oil marketing companies may see some initial gains, though sustained profit-taking cannot be ruled out.

Foreign portfolio investors have been net sellers in recent sessions, and Monday's developments could accelerate that trend. Domestic institutional investors, however, have provided a cushion through sustained buying.

Global Cues and Commodity Watch

Apart from oil, gold prices edged higher as investors sought safe-haven assets. The dollar index also strengthened, adding to the pressure on emerging market currencies. US futures pointed to a lower open on Wall Street later in the day.

Market participants will closely monitor any diplomatic statements from Washington or Tehran. Any signs of de-escalation could trigger a sharp recovery, but for now, the mood remains cautious.

All eyes will be on the Reserve Bank of India's next move. If crude stays above $90 for an extended period, the central bank may have to revise its inflation projections, delaying any rate cut expectations.