Mumbai: Indian equity benchmarks are poised for a restrained opening today, as echoes from the escalating Iran-Israel conflict reverberate across global markets, amplified by an emphatic warning from U.S. President Donald Trump urging Tehran's evacuation. This sudden surge in geopolitical tension is fostering a cautious demeanor among investors, despite a recent rebound in domestic indices.
The Gift Nifty futures, an early indicator of market sentiment, were trading marginally lower, signaling that the broader Nifty 50 is expected to commence trading near its previous closing levels. This muted anticipation contrasts with the robust performance seen in Monday's session, where Indian benchmarks surprisingly gained, primarily propelled by heavyweight IT and financial stocks, even as geopolitical anxieties simmered in the background.
However, the latest developments in the Middle East, particularly the intensified exchange of strikes between Iran and Israel, coupled with President Trump's stark call for civilians to evacuate Tehran and his early departure from the G7 summit, have reignited fears of a wider regional conflagration. This has already sent tremors through international markets, with U.S. stock futures slipping and global oil prices experiencing a notable uptick, reflecting concerns over potential supply disruptions from the crude-rich region.
Analysts are closely monitoring these evolving geopolitical developments, as they are expected to be key drivers for Indian equities in the immediate future. While domestic institutional investors have continued their streak of net buying, foreign portfolio investors have remained net sellers for the fourth consecutive session, indicating a cautious approach by international capital amidst the global uncertainty.
The trajectory of crude oil prices will be a critical factor, given India's significant reliance on imports. Any sustained rise could exert pressure on the rupee, fuel inflationary risks, and impact corporate profitability. While the Indian market has shown resilience in recent days, experts advise a selective, stock-specific approach, as the market navigates these turbulent geopolitical crosscurrents. The unfolding events in the Middle East, and the world's response, will undoubtedly dictate the pace and direction of Dalal Street in the coming days.