Sensex, Nifty set for weak start as rising US-Israel-Iran tensions jolt sentiment; crude oil at 5-month high

India VIX eased by 4.09 percent, settling at 13.67, remaining comfortably below the critical 15 threshold despite global geopolitical headwinds.

Benchmark indices Sensex and Nifty are set for a sharp drop at open on Monday, June 23, as escalating tensions in the Middle East spooked global markets. The US strike on three Iranian nuclear facilities has reignited fears of a wider conflict, with Iran’s parliament now backing the closure of the Strait of Hormuz, a key oil transit route, raising the risk of a fresh spike in crude prices. As of 7:15 am, Gift Nifty was down 135 points, or 0.5 percent, at 24,995.

Following the development, oil prices hit a five-month high and crossed over $80 per barrel. Experts suggest further price gains amid mounting fears that an Iranian retaliation may include a closure of the Strait of Hormuz, through which roughly a fifth of global crude supply flows.

In the previous session, the frontline indices snapped a three-day losing streak as broad-based buying sent the two rallying over one percent. Foreign portfolio investors (FPIs) outdid domestic institutional buyers on June 20, purchasing Indian equities worth Rs 7,940 crore, while Domestic institutional investors (DIIs) were net sellers of shares worth Rs 3,049 crore.

A notable development is the index's reclaiming of the key psychological barrier at 25,000, suggesting sustained buying interest at lower levels. A firm close above 25,250 could reinvigorate upward momentum, paving the way for a potential climb toward the 25,500 region. On the downside, any meaningful weakness would only surface if the index breaches 24,700 — until then, pullbacks are likely to be met with accumulation.

"For the Bank Nifty, the supply zone near the 57,000 level remains intact. Importantly, the index held above the 56,000 psychological support, indicating consistent accumulation on declines. A sustained close above 56,350 could unlock further upside, potentially driving the index toward the 56,800–57,000 range. On the downside, weakness would only be confirmed if the index decisively breaks below 56,000 — until then, dips are likely to be bought into," Dhupesh Dhameja of SAMCO Securities said.

India VIX eased by 4.09 percent, settling at 13.67, remaining comfortably below the critical 15 threshold despite global geopolitical headwinds. The cooling in volatility suggests fading fear and growing investor confidence, which typically supports the continuation of an upward trend.

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, jumped to 1.16 on June 20, compared to 1.03 in the previous session. The increasing PCR, or being higher than 0.7 or surpassing 1, means traders are selling more Put options than Call options, which generally indicates the firming up of a bullish sentiment in the market.