From Gift Nifty, US-Iran war, oil prices to bond yields: 10 key things that changed for Indian stock market overnight

The Indian stock market benchmark indices, Sensex and Nifty 50, are expected to witness short-covering on Thursday after a sharp selloff in the previous session amid escalating US-Iran war in the Middle East and surging crude oil prices.

Asian markets traded higher, while the US stock market ended mixed overnight after renewed tensions over the Middle East war.

On Wednesday, the Indian stock market crashed amid sharp selloff across the board, following the escalation of the US-Iran war and rising crude oil prices.

The Sensex tanked 1,677.12 points, or 2.15%, to close at 76,503.60, while the Nifty 50 settled 516.65 points, or 2.12%, lower at 23,882.05.

“Market participants will closely monitor progress between the US and Iran, along with the security of shipping routes, as these are expected to remain the key drivers of crude oil prices and overall market sentiment in the near term,” said Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.

Asian markets traded mixed on Thursday amid renewed US-Iran tensions and higher crude oil prices. Japan’s Nikkei 225 gained 2.17% and the Topix rose 0.54%. South Korea’s Kospi rallied 2.97% after falling into a bear market the day before, while the Kosdaq jumped 4.17%. Hong Kong’s Hang Seng index futures indicated a lower opening.

Gift Nifty was trading around 23,990 level, a premium of nearly 78 points from the Nifty futures’ previous close, indicating a positive start for the Indian stock market indices.

US stock market ended mixed on Wednesday after President Donald Trump said an interim deal aimed at ending the war with Iran was “over,” sending crude oil prices sharply higher.

The Dow Jones Industrial Average declined 1.09% to 52,348.39, while the S&P 500 fell 0.28% to end the session at 7,482.71. The Nasdaq closed 0.20% higher at 25,870.65.

Nvidia stock price rallied 3.65%, Microsoft shares fell 1.41%, Broadcom shares jumped 4.83%, Meta Platforms share price declined 2.02%, Alphabet shares dropped 1.35%, Apple stock price rose 0.88%, Tesla stock price shed 2.23%, and SpaceX shares eased 0.81%.

The US military said it was launching fresh strikes on Iran aimed at keeping the critical Strait of Hormuz open to traffic, hours after President Donald Trump declared that an interim agreement to end the war was “over.”

Some US Federal Reserve officials saw reasons to hike rates at the central bank’s June policy meeting given elevated inflation on fallout from the Middle East war, minutes of the meeting showed. Coupled with steady job market conditions, “a few participants commented that, in light of these developments, there was a case for raising the target range for the federal funds rate,” AFP reported.

The International Monetary Fund (IMF) cut its 2026 global economic growth forecast to 3.0% from 3.1% in its April forecast, saying an AI boom has not fully offset the fallout from war in the Middle East. The IMF said India remains among the fastest growing major economies, but cut India’s GDP growth forecast to 6.4% for fiscal year 2027, a tad slower than the 6.5% projected in April.

US Treasury yields rose to multi-week highs as crude oil prices jumped. The benchmark 10-year yield advanced to a seven-week peak of 4.597% during the session, while the 30-year bond yields also hit their highest in seven weeks, and were up 2.4 bps at 5.067%. The yield on 2-year notes climbed to two-week highs of 4.235%.

The benchmark 10-year Japanese Government Bond (JGB) yield hit a 30-year high, as rising oil prices rekindled inflation concerns. The 10-year JGB yield rose 1.5 bps to 2.880%, the highest since September 1996. The two-year yield increased 1 bp to 1.44%, and the five-year yield rose 1 bp to 1.995%.