The Indian stock market is expected to proceed with caution on Monday in response to heightened tensions between Israel and Iran.
Investors will closely watch developments in Western Asia, preparing for potential impacts on the market due to ongoing geopolitical tensions. Analysts predict increased volatility in the Indian stock market as investors adapt to the changing geopolitical environment.
“The escalating geopolitical tensions in the Middle East, alongside supply concerns, have propelled crude prices upward, impacting overall market sentiment” said Vinod Nair, Head of Research at Geojit Financial Services.
He further added, “Indian markets may consolidate amidst worries over delayed US rate cuts, escalating Middle East tensions driving oil prices up, and subdued Q4 earnings projections”.
The heightened tensions between Israel and Iran have increased geopolitical risks, leading market participants to evaluate potential implications for regional stability and global economic dynamics. Consequently, the Indian stock market could witness fluctuations in response to these geopolitical developments.
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“It is something not positive for equity markets worldwide. As long it is between Iran and Israel it is still manageable but if other countries join them, then the escalation will be more serious. However, our markets are resilient and can arrest at psychological support level which is at 22000 on Nifty,” said Shrikant Chauhan, Executive Vice President, Kotak Securities.
“This extensive onslaught marks another flashpoint in the Israeli- Hamas conflagration, a significant worsening of the geopolitical situation in general and the Middle East in particular. While World War III is not on the anvil- at least not yet, there is a clear possibility, nay likelihood, of horizontal escalation and retaliatory and even deterrent strikes by Israel” said Dr. Manoranjan Sharma, Chief Economist- Infomerics Ratings.
Analysts advise market participants to stay vigilant and exercise caution given the heightened geopolitical tensions. The ongoing impact of geopolitical events on market sentiment and investor confidence highlights the significance of closely monitoring developments in Western Asia.
Meanwhile, Foreign Portfolio Investors (FPIs) have maintained their status as net buyers for the third consecutive month in April in Indian stock markets. Data from the National Securities Depository Limited (NSDL) reveals that FPIs have purchased stocks worth Rs 13,347 crore in India thus far this month.
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