Indian equity markets are set for a strong opening on Wednesday, with the Nifty likely to reclaim the 24,000 mark, tracking a sharp rise in GIFT Nifty which was up around 200 points in early trade. According to reports from The Economic Times, the positive momentum comes amid improving global sentiment, driven by renewed hopes of diplomatic engagement between the United States and Iran. Markets remained shut on Tuesday on account of Ambedkar Jayanti, but global developments during the holiday have turned supportive. The latest developments mark a reversal from the cautious tone seen earlier in the week when geopolitical tensions had weighed heavily on investor confidence, with the Nifty and Sensex having ended Monday's session in the red due to rising tensions in West Asia and fears of disruption in oil flows.
Signals from US leadership that talks with Iran remain possible have eased immediate concerns of escalation in the Strait of Hormuz, a key route for global oil supplies. As reported by The Economic Times, this has led to some cooling in crude prices after recent sharp spikes, helping improve risk appetite across asset classes. Brent crude futures declined nearly 2% to trade at $97.5 per barrel, while WTI Crude futures dropped more than 2% to $97 per barrel on Tuesday morning. The cooling oil prices and rising hopes for peace talks boosted global markets, with US markets ending higher overnight, led by technology stocks, while Asian indices opened firm. This marks a significant shift from earlier market caution, with traders likely to position for a rebound as the latest cues suggest a potential shift in near-term sentiment.
Infosys ADR jumped more than 5%, while Wipro ADR gained more than 3% in US trade, signaling a potential rebound in IT stocks amid improving global tech sentiment. The rally was supported by strong gains in US tech stocks, with the tech-heavy Nasdaq Composite index gaining more than 1% on Monday. Adobe shares jumped more than 6%, while Salesforce rallied 5%. Accenture rallied nearly 7%, while Microsoft gained 4%. The S&P 500 erased all the losses it racked up since the war started in the Middle East, gaining over 1% to end at 6,886. The optimism over renewed Iran-US peace talks and falling crude prices has softened macro concerns, boosting sentiment for Indian IT companies heavily exposed to the US market.
From a technical perspective, analysts believe the broader market structure remains constructive. Nilesh Jain, VP and Head of Technical and Derivative Research at Centrum Finverse, said the index continues to support a buy-on-decline strategy as long as it holds above its 21-day moving average, placed at 23,270. According to The Economic Times, a decisive move above the 24,000 level could act as a trigger for short covering, potentially pushing the index towards the 24,200-24,400 zone in the near term. Momentum indicators are also supportive, with the relative strength index (RSI) holding above the 50 mark, signalling underlying strength in the trend.
Despite the positive outlook, volatility remains a key concern. The India VIX has risen sharply, gaining around 8% to move above the 20 mark, indicating elevated uncertainty in the market. As reported by The Economic Times, analysts caution that a sustained rally would require volatility to cool, as higher VIX levels tend to limit aggressive risk-taking. The India VIX has risen by approximately 8% to move above the 20 mark, indicating elevated uncertainty in the market, which continues to be a factor that traders will monitor closely.
