Financial markets are assessing the implications of the new US economic sanctions against Iran, with investors waiting to see how far-reaching the measures will be. Crude oil prices have fallen about 2.5 percent since the announcement, while the US dollar has also weakened.
Brent crude slipped below $92 a barrel, gold continued its rally and most Asian markets traded lower.
Gift Nifty futures on the GIFT City derivatives market closed at 24,144 on Monday night and climbed to 24,170 this morning, signalling a mildly weak opening for Indian equities.
The US has announced measures against countries and entities that continue economic dealings with Iran, including possible dollar-related sanctions. US Treasury Secretary Scott Bessent said countries could be excluded from the dollar-based banking system if they continue such transactions.
China, Iran's largest trading partner, could also come under pressure. Excluding China could limit the effectiveness of the measures, while targeting it could trigger wider economic repercussions.
The US is expected to give countries a specified period to wind down transactions with Iran. Failure to comply could result in restrictions on access to international banking and money-transfer systems. The measures are likely to be introduced gradually.
Iran, meanwhile, has said it knows how to circumvent sanctions. The first round of measures is expected to focus on companies and individuals accused of facilitating the illicit transportation of Iranian oil.
Pakistan's military chief, Field Marshal Asim Munir, visited Iran and held talks with senior leaders, but there appears to have been no significant outcome so far.
India has not yet officially responded to the latest developments.
The H-1B visa issue has resurfaced, with a proposed fee of $103,265 for the visas. The proposal follows a US court's decision to strike down the $100,000 fee imposed by the Trump administration last year.
A 30-day period has been provided for submitting objections, after which the proposed fee could take effect.
Indian nationals account for the overwhelming majority of H-1B visa beneficiaries. Shares of Indian IT services companies such as TCS, Infosys, Tech Mahindra and Wipro could react to the development. Their US-listed ADRs were weak in New York trading on Monday.
The S&P 500 and Nasdaq Composite fell on Monday as semiconductor stocks came under pressure, while the Dow Jones Industrial Average advanced.
The pressure in the US Treasury market eased slightly. A report that around $1 trillion in the Treasury General Account could potentially be used for Treasury buybacks helped reduce some market concerns. However, the underlying problems in the bond market have not disappeared, and renewed volatility could emerge next month.
The Dow Jones gained 140.15 points, or 0.26 percent, to close at 53,417.16. The S&P 500 fell 21.51 points, or 0.28 percent, to 7,652.86, while the Nasdaq Composite declined 200.26 points, or 0.77 percent, to 25,980.19.
US stock futures showed little movement this morning. Dow futures were down seven points, or 0.02 percent, while S&P 500 futures slipped three points, or 0.04 percent. Nasdaq futures gained 15 points, or 0.05 percent.
In New York's ADR market, HDFC Bank fell 0.25 percent during regular trading and lost another 0.51 percent in extended trading to close at $23.42.
ICICI Bank declined 0.90 percent during regular trading and slipped another 0.10 percent in extended trading to finish at $29.61.
Infosys fell 1.01 percent during regular trading but recovered 0.25 percent in extended trading to close at $11.85.
Wipro declined 0.53 percent during regular trading and gained 0.53 percent in extended trading to finish at $1.89.
European markets extended their weakness on Monday, although the UK's FTSE 100 closed higher. The euro remained relatively firm.
Asian markets were largely lower this morning. South Korea's Kospi fell about 3 percent, with Samsung Electronics down 4 percent and SK Hynix losing 5 percent. Japan's Nikkei declined 0.76 percent.
Australia's market gained 0.65 percent, while Hong Kong's Hang Seng rose 0.30 percent. Shanghai slipped 0.45 percent and Taiwan's benchmark fell 1.2 percent.
The Indian market opened with gains but turned lower and ended Monday with a modest loss. Concerns over the impact of the US economic offensive against Iran weighed on sentiment.
Public sector bank stocks declined amid fears that falling bond prices could hurt their treasury profits. Sugar stocks rallied sharply in early trade but later pared gains. Metal stocks benefited from expectations of higher inflation.
Foreign investors turned buyers on Monday, making net purchases of ₹1,181.66 crore in the cash market. Domestic institutional investors were also net buyers, purchasing shares worth ₹2,493.41 crore.
The Sensex fell 171.72 points, or 0.22 percent, to close at 77,369.11. The Nifty 50 declined 32.95 points, or 0.14 percent, to 24,219.05.
Bank Nifty fell 236 points, or 0.41 percent, to 57,525.95. Nifty Midcap 100 gained 81.50 points, or 0.13 percent, to 63,817.25, while Nifty Smallcap 100 declined 51 points, or 0.26 percent, to 19,926.75.
Market breadth was weak. On the BSE, 1,973 stocks advanced while 2,467 declined. On the NSE, 1,726 stocks gained and 1,810 fell.
Gold's rally continued after gaining about 6 percent in seven days. The metal is now attempting to move towards $4,700 an ounce.
A Bank of America survey indicated growing bullish sentiment towards gold. After gaining 1 percent on Monday, gold closed at $4,652.80 an ounce. It rose to $4,697.50 this morning before easing towards $4,670.
In Kerala, 22-carat gold rose by ₹640 per sovereign on Monday to ₹1,20,240. Prices could rise sharply again today.
Silver slipped slightly on Monday to close at $69.09 an ounce. It climbed to $70.08 this morning before easing.
Platinum stood at $1,879, palladium at $1,347 and rhodium at $8,550 an ounce.
International rubber prices rose sharply, although prices in Kerala remained unchanged.
In Bangkok, RSS 1 rose to $286.20 per quintal and RSS 3 to $282.70. In Kerala, RSS 4 remained at ₹27,400 per quintal.
Industrial metals extended their gains on Monday. Copper rose 0.36 percent to $14,342.85, while aluminium gained 0.20 percent to $3,222.28.
Zinc, lead, tin and nickel also moved higher.
Cocoa prices fell 1.74 percent to close at $5,929 a tonne.
Ghana's cocoa board expects production to fall 13 percent because of adverse weather conditions. Production in Ivory Coast, another major cocoa producer, is expected to decline by more than 10 percent.
Hedge Point Global Markets estimates that the global cocoa surplus could fall 66 percent in 2026-27 to 111,000 tonnes.
Arabica coffee prices surged 5.94 percent to $3.418 a pound amid concerns that El Niño could reduce production.
Palm oil, which had crossed 5,000 Malaysian ringgit over the weekend, fell 1.43 percent on Monday to 4,946 ringgit.
Lower production and increased use of palm oil for biodiesel in Indonesia are supporting prices.
The US Dollar Index rose on Monday to close at 99.00 but slipped to 98.95 this morning.
The euro fell to $1.1669 and the pound to $1.3637. The Japanese yen stood at 159.12 to the dollar, while the Chinese yuan remained around 6.72 to the dollar.
The yield on 10-year US Treasuries fell to 4.708 percent on Monday, while the 30-year yield declined to 5.236 percent.
The Indian rupee ended slightly weaker on Monday. The dollar gained five paise to close at ₹95.75.
In the overseas forward market, the dollar was trading at ₹95.74 this morning.
The Chinese yuan was at ₹14.24 and the euro at ₹111.73.
Crude oil prices fell about 2.5 percent on Monday.
Brent crude declined $2.22 to close at $92.17 a barrel and slipped further to $91.96 this morning. West Texas Intermediate crude was at $85.02.
Cryptocurrencies continued their upward move. Bitcoin, which had weakened yesterday morning, climbed above $78,750 today.
Ether moved above $2,475, while Solana crossed $99.50.
Sensex 77,369.11 -0.22%
Nifty 50 24,219.05 -0.14%
Bank Nifty 57,525.95 -0.41%
Nifty Midcap 100 63,817.25 +0.13%
Nifty Smallcap 100 19,926.75 -0.26%
Dow Jones 53,417.16 +0.26%
S&P 500 7,652.86 -0.28%
Nasdaq 25,980.19 -0.77%
Dollar ₹95.75 +₹0.05
Gold (ounce) $4,652.80 +$48.40
Gold (sovereign) ₹1,20,240 +₹640
Brent crude $92.17 -$2.22
