Mumbai: In a major escalation of Middle East tensions, the United States on Saturday launched precision airstrikes targeting Iran’s key nuclear sites at Fordow, Natanz, and Isfahan.
The attacks, allegedly in response to Iran’s increasing involvement in the Israel–Hamas conflict, have rattled global financial markets and are expected to trigger heightened volatility in Indian equities when markets open on Monday.
US President Donald Trump confirmed that all American aircraft involved had safely exited Iranian airspace. However, the geopolitical shock has already unsettled investors, with crude oil prices spiking 2–3 percent in early trading. Brent crude surged close to USD 79 per barrel, stoking inflationary fears in oil-importing economies like India.
Indian Equities Face Uncertainty
The Indian stock market had closed the week on a strong footing, with the Nifty 50 climbing 1 percent to end at 25,112.40 and the Sensex gaining 1.3%. Bank Nifty also posted a 1.2 percent rise to 56,252.85. However, the US-Iran conflict has cast a shadow over these gains.
Analysts expect a weak opening on Monday, with the GIFT Nifty indicating a 150-point gap-down in early trade. “Markets will react to global cues, especially oil prices and geopolitical headlines,” said Kranthi Bathini of WealthMills Securities. “If tensions escalate, Nifty may find support near 25,000, while a breach could push it towards 24,700 or lower.”
Technical analysts are watching the 25,200 mark on the Nifty for signs of a breakout. A move above this level could send the index towards 25,600–25,800, while immediate downside support lies at 24,400.
Ajit Mishra of Religare Broking added, “The Bank Nifty, having reclaimed the 56,000 zone, may head towards 57,000–58,200 if momentum sustains. However, global risk aversion could limit upside.”
Oil Shock and Currency Pressures
A key concern for India is the surge in oil prices. Brent crude touched a five-month high, amid fears that Iran may retaliate by targeting strategic routes like the Strait of Hormuz — a vital channel for global oil supplies. Prolonged price spikes beyond USD 80–USD 100 per barrel could significantly impact India’s import bill and inflation outlook.
The Indian rupee, which closed at Rs. 86.59 per dollar on Friday, may come under further pressure. Currency experts expect the rupee to test Rs. 87.50 in the near term amid safe-haven flows into the US dollar.
Bond yields are also likely to inch higher. The 10-year benchmark yield is expected to move within the 6.30 percent–6.40 percent range, driven by inflationary concerns from higher fuel costs.
Sectoral Watch and Stock Picks
Despite geopolitical concerns, Indian markets have shown resilience, bolstered by the RBI’s dovish tone and easing of priority-sector lending norms for small finance banks. Analysts are recommending a cautious yet opportunistic approach.
Defensive sectors such as FMCG, pharmaceuticals, and utilities may provide shelter amid turbulence. Meanwhile, select brokerages have recommended eight stocks for Monday’s trade:
Choice Broking’s Sumeet Bagadia: Buy KFin Technologies (Target USD 1,360; SL USD 1,230) and Go Digit General Insurance (Target USD 380; SL USD 344).
Anand Rathi’s Ganesh Dongre: Buy HDFC Bank (Target USD 1,410; SL 1USD ,320).
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Prabhudas Lilladher’s Shiju Koothupalakkal: Buy Tata Motors, National Aluminium Co, Welspun Corp, Torrent Power, and Ideaforge Technology.
Outlook: Brace for Volatility
Investor sentiment is expected to remain cautious in the coming days, with analysts advising a close watch on global cues and domestic support levels. UBS said any dip in Indian equities could be viewed as a buying opportunity, provided the geopolitical situation does not deteriorate further.
“India’s strong macroeconomic fundamentals and comfortable forex reserves offer some cushion,” said Nilesh Shah of Kotak AMC. “However, persistent oil shocks above USD 100 would pose real challenges.”
Markets will be closely monitoring crude prices, foreign institutional flows, and Iran’s response. As uncertainty looms, traders are advised to stay nimble and focus on risk management.
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