Investors remain cautious as Dalal Street absorbs renewed geopolitical risk after US President Donald Trump warned the Iran war could last four to five weeks, adding to the uncertainty that has rattled Indian markets.Markets were shut on Tuesday for Holi, but global cues remained tense after Trump said the conflict “has always been a four-week process” and could continue for “four weeks or less”. He added that he remains open to talks with Iran, though without clarity on the timing of negotiations.
The warning comes after Monday’s sharp sell-off, when the BSE Sensex plunged 2,743 points in early trade before closing 1,048 points lower at 80,238, down 1.29%. The Nifty ended near 24,850. Investor wealth shrank by Rs 6,59,978 crore as the total market capitalisation of BSE-listed firms fell sharply.Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, said the decline reflected a clear risk-off move. “Indian equities witnessed a sharp decline as escalating tensions in West Asia triggered a pronounced risk-off response. Markets reacted to US and Israeli strikes on Iran and subsequent regional retaliation, prompting a flight to safe-haven assets,” he said, as quoted ET.With the prospect of a longer conflict, attention now shifts to crude oil prices and global market trends.Vinod Nair, Head of Research at Geojit Investments, said rising crude oil prices and a weakening rupee reflect fears of supply disruptions. Higher oil could fuel inflation, impact fiscal balances and strain margins for energy- and chemical-dependent sectors, he noted. He added that the India VIX has moved higher, signalling increased uncertainty, while foreign institutional investor selling has intensified following the spike in crude.From a technical standpoint, analysts see markets in a weak but potentially oversold zone.Shrikant Chouhan, Head of Equity Research at Kotak Securities, said the indices are trading well below short- and medium-term averages and intraday charts show a largely negative formation. However, he added that the market appears oversold and a technical bounce cannot be ruled out.He identified 24,750 on the Nifty and 80,000 on the Sensex as crucial support levels. “As long as the market is trading above this, a pullback formation is likely to continue,” Chouhan said, adding that the Nifty could attempt a move towards 25,000-25,075. A break below 24,750 could push the index towards 24,650-24,500.Gaurav Udani, Founder of Thincredblu Securities, sees resistance around 25,100 on the Nifty, with support in the 24,550-24,600 band. “A sustained break below this support band could extend downside pressure, while reclaiming resistance is necessary for any short-term stabilisation,” he said, advising traders to avoid leveraged positions amid heightened geopolitical uncertainty.Oil remains the key trigger. US West Texas Intermediate crude rose more than 1% to around $70.59 per barrel on Tuesday, extending gains from the previous session when prices had surged nearly 14%. Analysts said a sustained crude rally could worsen inflation expectations and pressure the rupee, while any cooling in prices may offer markets some breathing room.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
