Sensex, Nifty slip again: Is Trump’s Iran ultimatum driving the fall?

New Delhi: Indian benchmark indices opened sharply lower on Tuesday, weighed down by surging crude oil prices and rising geopolitical tensions after Donald Trump renewed threats against Iran.

The BSE Sensex fell 735.65 points or 0.99 per cent to 73,371.20 at 9:16 am, while the NSE Nifty 50 dropped 226.95 points or 0.99 per cent to 22,741.30 in early trade.

The weak opening comes amid a spike in Brent crude prices, which rose to USD 111.43 per barrel, up 1.51 per cent, as markets reacted nervously to Trump’s ultimatum linked to the Strait of Hormuz.

The escalating rhetoric has heightened concerns over global supply disruptions, inflation risks, and India’s import bill, dampening investor sentiment.

Ajay Bagga, Banking and Market Expert, said, "One more deadline with dire threats looms for the markets on Wednesday morning Asia time, Tuesday night in the US. Markets are holding up with Japan and Korea up this morning. Oil is stable. Indian markets are showing a negative open with continued FII selling daily, causing weakness."

Despite the early losses, analysts noted that the market had recently seen a phase of recovery led by sectors such as consumer goods, PSU banks, and realty. However, Tuesday’s decline has brought focus back to key technical levels.

Shrikant Chouhan, Head Equity Research at Kotak Securities, said, "Technically, after a muted open, the market found support near 22,550/72700 and reversed sharply. On daily charts, it has formed a bullish candle, and on intraday charts, it is holding a higher bottom formation, which is largely positive. We are of the view that the market has completed one leg of the pullback move; hence, buying on intraday corrections and selling on rallies would be the ideal strategy for day traders."

Chouhan added that a breach of key support levels could weaken the ongoing trend. "We consider 22,700/73500 and 22,500/72700 as key support zones for traders, while 23,200/74500 and 23,300/75000 could act as crucial resistance levels. However, if the index falls below 22,500/72700, the uptrend may become vulnerable. In such a scenario, traders may prefer to exit their long positions. The strategy should be to reduce weak long positions between 23150-23250/74500-74800 levels," he said.

Meanwhile, global cues remained mixed. U.S. markets ended higher overnight, with gains in the S&P 500 and Nasdaq extending for a fourth straight session, while the Dow Jones also closed in positive territory.