Opening Bell - Morning Commentary

U.S.-Iran Tensions Drive Oil Above $70, Nifty Breaks Key Resistance Levels

Volatility surged through world markets on Thursday as fears over a U.S. strike on Iran and the threat of another U.S. government shutdown roiled oil and metals, while AI bubble concerns hammered tech stocks and pushed the Nasdaq and S&P 500 into negative territory.

Oil prices climbed sharply, driven by renewed geopolitical risk concerns centred on U.S.-Iran tensions. Brent crude broke above $70 a barrel on Thursday for the first time since July, while WTI crude reached its highest level since September. The rally was triggered by President Trump's escalating threats of military action against Iran and deployment of naval forces to the region, combined with an unexpected 2.3 million barrel drop in U.S. crude inventories.

US stocks mounted a substantial recovery attempt during Thursday's trading session. The major averages climbed well off their worst levels of the day, with the Dow reaching positive territory.

The early sell-off on Wall Street stemmed from a steep drop in Microsoft shares, which plummeted 10.0 per cent to its lowest closing level in nine months.

Microsoft came under pressure after reporting slowing cloud growth in its fiscal second quarter and providing disappointing third-quarter operating margin guidance.

U.S. software stocks declined on Thursday after SAP's underwhelming cloud outlook and a post-earnings slide in ServiceNow deepened concerns that traditional providers are being outpaced by artificial-intelligence players. ServiceNow was down 9%, and SAP fell sharply after weak cloud backlog results. Investors fear AI could disrupt traditional software business models, with markets now demanding clear monetisation strategies rather than increased spending on AI infrastructure alone.

Meta spiked 10.4 per cent on the day after the Facebook parent reported better-than-expected fourth-quarter results and forecast first-quarter revenues above analyst estimates.

Asian Stocks remained volatile in early trading on Friday after U.S. President Donald Trump endorsed a bipartisan deal to avert a fresh government shutdown.

The Nifty extended its winning streak to a third session, adding 76 points to settle at 25,418 in a highly volatile session.

Market sentiments were buoyed by the Economic Survey presented in parliament by the Union Finance Minister, which projected FY26 real GDP growth at 7.4% amid macroeconomic resilience, low inflation, and structural reforms.

Nifty has surpassed crucial resistances at the 10 DEMA (25396) and the swing high (25435). Nifty seems to have reversed the short-term bearish trend and could head higher towards the next resistance levels of its 20 and 50-DEMAs, at 25568 and 25712, respectively. Support for the index shifted higher to 25150.

Indian markets are positioned to open modestly lower on cautious global cues.