Nifty set to reclaim 24,000 as US-Iran dialogue hopes lift global cues

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. 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. 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. This has led to some cooling in crude prices after recent sharp spikes, helping improve risk appetite across asset classes.

Global equities have responded positively to these developments. US markets ended higher overnight, with gains led by technology stocks, while Asian indices opened firm, reflecting a broader risk-on sentiment. This marks a reversal from the cautious tone seen earlier in the week when geopolitical tensions had weighed heavily on investor confidence.

Back home, the Nifty and Sensex had ended Monday’s session in the red, pressured by rising tensions in West Asia and fears of disruption in oil flows. However, the latest cues suggest a potential shift in near-term sentiment, with traders likely to position for a rebound.

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.

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.
That said, 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. Analysts caution that a sustained rally would require volatility to cool, as higher VIX levels tend to limit aggressive risk-taking.On the macro front, domestic indicators continue to provide a degree of stability. Recent inflation data has remained largely under control, with limited pass-through from elevated energy prices so far. This offers some cushion to equities even as global uncertainties persist.

Looking ahead, near-term market direction will remain closely tied to geopolitical developments and crude oil movements. While the easing of tensions has provided immediate relief, the situation remains fluid.