Indian benchmark indices Sensex and Nifty are expected to remain under pressure as escalating tensions in the Middle East following the killing of Iran’s Supreme Leader Ali Khamenei heighten geopolitical uncertainty and raise concerns over crude oil prices.
The development has triggered fears of strong retaliation from Tehran and a potential widening of the conflict involving the US and Israel. Global markets are closely monitoring the situation, with investors bracing for volatility across asset classes.
Market participants expect a weak or gap-down opening on Monday amid risk-off sentiment. The immediate reaction is likely to be negative as investors reassess geopolitical risks and the possibility of a spike in energy prices. Crude oil remains the key factor to watch, given India’s heavy dependence on imports.
If crude prices move sharply higher, inflationary pressures could intensify, weighing on rate-sensitive sectors and corporate margins. Sectors such as oil marketing companies, aviation, automobiles, paints, logistics, and consumer discretionary may face near-term pressure. On the other hand, export-oriented sectors like IT could see relatively better performance amid a stronger US dollar and global risk aversion.
On Friday, benchmark indices had already closed sharply lower amid rising geopolitical concerns and foreign fund outflows. The BSE Sensex fell 961.42 points or 1.17% to settle at 81,287.19, while the NSE Nifty declined 317.90 points or 1.25% to 25,178.65. Broad-based selling was seen across auto, financial, FMCG, and metal stocks.
Investors are expected to remain cautious in the coming sessions as markets evaluate whether the current escalation evolves into a prolonged conflict or stabilises in the near term.
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