US, Israel strike Iran: What do rising Middle East tensions mean for Indian stock markets next week? Here’s what experts say
Escalating tensions between Israel and Iran are set to test investor nerves at the start of the week, with Indian equities likely to open sharply lower amid a risk-off mood across global markets.The nervousness follows Israel’s preemptive strikes on Iran after nuclear deal talks with the US failed to yield a breakthrough. President Donald Trump described the action as a “major combat operations in Iran” in a video posted on social media after the strikes were launched near the offices of Supreme Leader Ayatollah Ali Khamenei.Global cues remain weak and are expected to weigh on domestic equities despite India’s Q3 GDP growth of 7.8%, which reflected broad-based strength in the economy.Kranthi Bathini, Director–Equity Strategy at WealthMills Securities, said markets had been bracing for such an escalation. “Finally the inevitable happened after weeks of uncertainty. The Street was anticipating conflict blowing into war sooner or later,” he said, quoted ET.Bathini expects choppy trade with sharp cuts likely in the near term. He said crude oil prices will be the key trigger for Indian markets, warning that levels around $80 per barrel could turn strongly negative. His advice to investors is to remain invested and use corrections to buy on dips for the long term.“The Iranian response will decide the course of the conflict,” Bathini added.Market expert Anuj Gupta also expects a weak opening and advised investors to trim existing positions and wait for clarity before initiating fresh trades.
Benchmarks ended weak on Friday
Indian benchmarks had already closed lower on Friday amid broad-based selling pressure. The Nifty fell 317.90 points, or 1.25%, to end at 25,178.65, while the 30-share Sensex dropped 961.42 points, or 1.17%, to settle at 81,287.19. Auto, financial and FMCG stocks were major laggards, while IT saw selective buying.
Geopolitical risks intensify
According to news agency AP report, Iran currently maintains a self-imposed limit of 2,000 kilometres on its ballistic missile programme, placing much of the Middle East and parts of eastern Europe within reach. Iran has said it no longer enriches uranium but has blocked international inspectors from visiting sites targeted during earlier US strikes.AP reported that satellite images showed fresh activity at two such sites, suggesting Iran may be assessing or recovering material.Ahead of the strikes, the US had built up a large military presence in the Middle East, including the aircraft carrier USS Abraham Lincoln and guided-missile destroyers.Explosions were reported in northern Israel as air defence systems intercepted incoming Iranian missiles, with nationwide warnings issued. There was no immediate confirmation of casualties.
Global markets signal caution
Wall Street ended lower on Friday. The Dow Jones fell 521.28 points, or 1%, to 48,977.90. The Nasdaq Composite dropped about 210 points, or 1%, to 22,668.20. The S&P 500 declined 0.43%.European markets were mixed, while Asian cues remained cautious.
Technical levels in focus
Bajaj Broking said volatility is likely to stay elevated amid uncertain global cues, adding that the 25,400–25,500 zone may act as immediate resistance.Dr Ravi Singh, Chief Research Officer at Master Capital Services, told ET the index has breached its critical 25,300 support and the 200-day EMA, signalling a bearish shift in short-term momentum.“For the coming week, the 25,000 psychological mark stands as the make-or-break level and a breakdown here could drag prices toward the 24,800 area,” Singh said. “Strategy remains sell on rises until the index decisively reclaims 25,600. Expect continued volatility as the market searches for a stable bottom.”(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
