Will the stock market fall today? Sensex, Nifty signal weak start amid Iran-Israel war — Here’s what Anil Singhvi said

Indian equity markets are likely to open on a weak note on Monday, tracking negative global cues after a sharp escalation in Middle East tensions and a spike in crude oil prices.

GIFT Nifty, Asian markets and US futures are all indicating risk-off sentiment, while oil remains the key variable for domestic investors.

GIFT Nifty signals gap-down start

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GIFT Nifty was down 55 points at 25,230 in early trade, indicating a gap-down opening for domestic benchmarks.

This comes after US markets closed sharply lower. The Dow Jones Industrial Average ended 676 points down, while Dow Futures were further lower by 308 points. The S&P 500 was down 37 points in futures trading.

The weak US close and continued pressure in futures suggest that global investors remain cautious after the joint US-Israel strikes on Iran and subsequent retaliation.

Asian markets reflect a risk-off mood

Asian markets reacted sharply to the weekend developments. Japan’s Nikkei 225 fell over 631 points, down nearly 2.4 per cent at one stage. Hong Kong’s Hang Seng Index declined 264 points. South Korea’s Kospi slipped about 1 per cent.

In Sydney, the ASX 200 opened sharply lower before trimming losses to trade around 0.4 per cent down. European markets had ended weakly earlier, with Germany’s DAX and France’s CAC 40 closing in the red. The UK’s FTSE 100 was the only major index trading higher, up around 0.59 per cent.

The broad decline across regions suggests Indian equities may remain under pressure in early trade.

Oil prices spike, then cool off

Crude oil is the central focus for markets. Brent crude surged as much as 13 per cent in early trade, touching around USD 82 per barrel, a 14-month high. Traders said it had jumped nearly 10 per cent in over-the-counter trade on Sunday to about USD 80 per barrel.

However, prices later cooled from the opening highs. Brent, after crossing USD 80, eased to around USD 76, though it remained 5–7 per cent higher in early trading.

The spike followed coordinated US-Israel strikes on Iranian targets and Iran’s retaliatory action, which raised concerns over supply disruptions through the Strait of Hormuz. More than 20 per cent of the global oil supply passes through the narrow waterway.

Shipping data showed that at least 150 tankers, including crude and LNG vessels, dropped anchor beyond the Strait, while dozens more were stationary on the other side. Most tanker owners and oil majors reportedly suspended shipments via the route after Tehran warned ships against movement.

For India, which imports a large share of its crude requirement, sustained high oil prices could impact inflation, the fiscal position and corporate margins.

Expert view: Risk partly priced in

Market expert Ajay Bagga said the scale of the latest strikes was larger than the brief 12-day conflict seen last June. “Given the scale of the joint bombing by the US and Israel, the situation looked serious over the weekend. Iran’s retaliation targeting American bases in GCC countries increased concerns of a wider escalation,” he said.

However, he noted that financial markets appeared relatively stable on Monday. “Much of the risk was already priced in as there had been speculation for weeks about a possible US strike. Asian markets and US futures indicate that the impact may be contained for now,” he said.

Bagga pointed to oil prices as the key indicator for markets, including India. “Brent had crossed USD 80 during Middle East trading but has since eased to around USD 76. That suggests markets are expecting some form of agreement with the new Iranian leadership, particularly on the nuclear issue,” he said.

He added that fears of a full closure of the Strait of Hormuz had driven the initial spike. “If the Strait of Hormuz were fully shut, Brent could have surged much higher. However, Iran’s foreign minister indicated that the Strait has not been formally closed,” he said.

What this means for Indian markets

With GIFT Nifty indicating a negative start and Asian markets under pressure, the Sensex and Nifty are likely to open lower.

Oil-sensitive sectors such as aviation, paint, oil marketing companies and logistics may see selling pressure if crude sustains above USD 80 per barrel. Upstream oil producers may see relatively better sentiment.

A stronger US dollar and rising safe-haven demand — including a 2.8 per cent rise in gold prices — also indicate global risk aversion. This could lead to cautious foreign institutional investor activity in emerging markets like India.

However, Brent's cooling from its peak near USD 82 to around USD 76 suggests that markets are not yet pricing in a prolonged full-scale regional war.

“For now, price behaviour suggests that the conflict, though serious, may not escalate into a prolonged global economic shock,” Bagga said.

Overall, Indian equities are expected to start weak, tracking global markets and oil prices. Intraday movement is likely to depend on crude oil trajectory, currency stability and any fresh geopolitical developments.

What Jefferies Said on Middle East Conflict?

Jefferies said the impact of the ongoing Middle East conflict on India is likely to be short-term, though a prolonged escalation combined with a sharp rise in energy prices would be a major macroeconomic negative.

In its India strategy note, Jefferies said India has strong economic links with the Middle East, with the region accounting for 17 per cent of India’s exports, supplying 55 per cent of its crude oil needs and contributing 38 per cent of worker remittances.

“A prolonged conflict, alongside a large jump in energy prices, would be a major macro negative,” the brokerage said. However, it added that recent regional conflicts have tended to be temporary and any sharp market dip could present a buying opportunity.

Jefferies said the immediate impact would be negative for oil marketing companies, travel and hospitality firms, and rate-sensitive stocks, while defence companies could benefit.

Among companies with significant exposure to the region, it highlighted Larsen & Toubro, noting that over 25 per cent of its consolidated exposure and more than 40 per cent of its EPC order book are linked to the Middle East. It also cited Newgen Software, which derives about 30 per cent of its revenues from the region.

Other companies with meaningful exposure of around 5–10 per cent include consumer names such as Dabur India and Titan Company, and select pharma firms such as Ajanta Pharma, Biocon and Cipla.

It added that major hospital chains derive around 8–10 per cent of revenue from international patients, while other companies with exposure include PB Fintech and Voltas.

Key levels to watch

According to market expert and Zee Business Managing Editor Anil Singhvi, some downside may already be discounted. “You may see GIFT Nifty down 100 points, but effectively Nifty may be 250 points lower because we already fell 150 points extra on Friday,” he said.

He identified 24,825 as a strong support level for Nifty, noting that it was also the closing level on Budget day, February 1. “This level can act as support now. On the upside, 25,325 to 25,400 will act as resistance,” he said.

For Bank Nifty, he said the 59,800–60,000 zone is an important support area. “On the upside, 60,650 to 60,800 will act as resistance,” he added.

Advice to investors

Singhvi advised investors to remain cautious in the current volatile environment. “It is better to keep action limited and calmly observe how much reaction the market gives,” he said.

He reiterated that crude oil is the most important factor for Indian markets amid the ongoing global tension. “For Indian markets, the most important factor is how long and how much crude oil stays elevated,” he said.

He noted that crude near USD 80 per barrel is negative for India. However, with prices cooling towards USD 77, he said the market reaction appears relatively mature.

He indicated that while the overall impact is negative, the extent of the fall will depend largely on crude oil movement and further geopolitical developments.