Key Highlights
- Nifty 50 opened below 25,000, falling about 1%, amid global risk-off sentiment triggered by U.S.–Iran tensions.
- BSE Sensex plunged over 600 points (≈ 0.85%), with mid-, small-caps and IT sectors leading losses.
The Indian equity benchmark indices, the Nifty50 and the BSE Sensex, fell in the opening trade on Monday, following global cues. While the Nifty50 fell below 25,000, the BSE Sensex dropped more than 600 points.
The escalating conflict between Israel and Iran, as well as US involvement, are expected to have an impact on market performance Monday. Market analysts predict that global factors will be important as investors watch US manufacturing and services PMI data, as well as geopolitical developments. The market's outlook indicates consolidation with expected volatility.
According to VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, "Even though the US bombing of Iran's three nuclear facilities has exacerbated the West Asian crisis, the market impact is likely to be limited." The timing and nature of Iran's response are currently uncertain. If Iran targets and damages US defense facilities in the region, or seriously injures US military personnel, the US response could be massive, escalating the crisis. However, the market believes Iran's ability to threaten the United States and Israel is limited. That is why the initial market reactions--crude prices, US futures, lack of panic in Asian markets--have been muted."
Also Read: Trump's Airstrikes on Iran Could Risk India's $40 Billion Trade
"Despite the potential threat of closing the Hormuz Strait, it is crucial to keep in mind that this threat has always existed and that the Strait has never been closed. In actuality, Iran and its ally China stand to lose the most from the closure of the Hormuz Strait. The market continues to favour a 'buy on dips' strategy."
Following the US attacks on Iranian nuclear facilities, US stock-index futures fell early Monday in Asia, while oil prices rose. Asian stocks exhibited weakness.
Gold prices rose slightly on Monday as investors sought safe-haven assets amid rising Middle East tensions, with markets waiting for Iran's response to US strikes on its nuclear facilities.
Due to worries about supply disruptions, oil prices increased Monday to their highest level since January after the United States decided to back Israel in its attack on Iranian nuclear facilities.
On Friday, foreign portfolio investors bought shares worth Rs 7,940 crore net, while domestic institutional investors sold them for Rs 3,040 crore.The net short positions held by foreign institutional investors in the futures market decreased from Rs 96,962 crore on Thursday to Rs 96,368 crore.
