Israel-Iran war likely to weigh on Indian markets this week

Rising Israel-Iran tensions may pressure Indian markets as crude prices climb on Strait of Hormuz concerns. Analysts warn inflation risks if oil tops $80, while energy and defence stocks could gain. Nifty 50 signals weakness amid volatility and geopolitical uncertainty 

Mumbai: Escalating tensions between Israel and Iran are expected to weigh on Indian markets in the near term, mainly driven by a rise in energy prices, analysts said on Sunday. Analysts said that oil marketing companies, aviation, paints, autos, consumer discretionary and logistics could face pressure due to the tension in the Middle East. The immediate market reaction is likely to be negative as investors assess whether the flare‑up will become a prolonged conflict or remain a short‑term one, they said, adding that rise in geopolitical tensions generally create selling pressure in the markets.

Crude has firmed amid concerns about possible disruptions through the Strait of Hormuz, trading around $67–$68 a barrel rising around 2 per cent. Analysts warned that a sustained move above $80 a barrel would add significant macroeconomic strain for India, a major oil importer, and could fuel inflation, squeezing corporate margins. However, analysts said that energy and defence stocks typically could find support in the near term.

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Gold, silver and US Treasurys could attract safe‑haven flows, they forecasted. Questions over succession are in the air following the death of Iran’s Supreme Leader Ayatollah Ali Khamenei, with his second eldest son, Mojtaba Khamenei, emerging as a possible frontrunner, according to multiple reports.

On the technical front, experts noted that the Nifty 50 index has turned weak after closing below its 200-day exponential moving average (EMA). Technically, immediate resistance for the Nifty 50 is seen in the 25,300–25,350 range, while strong support is placed around the 25,000–25,050 zone, said market experts.

“If the index holds above the support level, some stability may return. However, a decisive break below this range could trigger further downside pressure,” an analyst mentioned.

With markets closed on Holi day, the weekly Nifty expiry shifts to Monday, compressing the trading window. Such calendar adjustments often amplify short-term positioning moves, potentially keeping volatility elevated, said market watchers.