Geopolitical Tensions Shake Indian Equity Markets as Crude Prices Surge

Indian equity markets faced pressure on Friday as benchmark indices Nifty 50 and BSE Sensex opened lower due to escalating geopolitical tensions between the US and Iran, alongside rising crude oil prices. The Nifty 50 index dropped to 25,406.55, shedding 47.80 points or 0.19 per cent, while the BSE Sensex fell to 82,272.49, losing 225.65 points or 0.27 per cent. Market analysts attributed this weakness to global uncertainties and growing geopolitical risks. Banking and market expert Ajay Bagga highlighted a 'risk-off sentiment', influenced by Iran's geopolitical tensions and weakened investor confidence following the US market's vulnerability. He noted a cooling macroeconomic backdrop in the US, stabilization in the Eurozone, and managed stabilization in China's property sector. Heightened risk stems from Iran's refusal to halt uranium enrichment, escalating tension with the US. President Trump cautioned Tehran of severe consequences if a deal isn't reached within a month. A US military buildup in the region could provoke Iranian retaliation. Rising crude oil prices, surpassing USD 70, further dampened investor morale. The sentiment of caution held firm with precious metals maintaining strength. Gold was steady at Rs 155,277 per 10 grams for 24 karat, and silver increased by 1.14 per cent to Rs 244,113 per kg. NSE broad market indices also suffered declines; Nifty 100 fell by 0.18 per cent, Nifty Smallcap 100 by 0.15 per cent, and Nifty Midcap index by 0.24 per cent. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, remarked on the rise in Brent crude prices as a reflection of market fears and uncertainty. He noted the ongoing weakness in IT stocks but pointed to the robust Indian economy and recovery in corporate earnings as positives. Should the US-Iran situation resolve, a market rebound is possible in the coming days, encouraging investors to monitor developments in West Asia closely. Elsewhere in Asia, mixed trends were observed. Japan's Nikkei 225 index fell by 1 per cent to 56,845, while Hong Kong's Hang Seng index dropped 0.63 per cent to 26,536. Taiwan's market remained closed, but Singapore's Straits Time index enjoyed a slight increase of 0.15 per cent to 5,007, whereas South Korea's market rallied strongly, rising over 1 per cent to 5,762. The US markets also contributed to the global caution, ending Thursday in the red. The S&P 500 declined by 0.28 per cent to 6,861, while the Nasdaq fell by 0.36 per cent to 22,672.72. Overall, the combination of geopolitical tensions, elevated crude oil prices, and global market vulnerabilities continue to shape the cautious outlook. (With inputs from agencies.)