The ongoing crisis in the Middle East, with the US and Israel attacking Iran, has heightened tensions and will likely lead stock markets to react negatively on Monday. Analysts anticipate markets to open with a cautious to negative bias, influenced by geopolitical instability, elevated crude oil prices, and macroeconomic data releases. Following the death of Iran’s Supreme Leader Ayatollah Ali Khamenei in an attack, concerns over energy security and economic stability have intensified, affecting global markets.
In India, where the economy is sensitive to oil price fluctuations, the rise in crude prices threatens inflation and could disrupt fiscal balance and rate-cut anticipations, according to Santosh Meena of Swastika Investmart Ltd. The benchmark indices are expected to reflect this uncertainty with increased volatility.
The impact on Indian markets may extend depending on the duration of the conflict, notes VK Vijayakumar of Geojit Investments Limited, who warns of consequences for trade and payments if oil prices remain high. Brent Crude’s surge to $72.87 per barrel underscores this threat.
Domestically, investors will watch economic indicators such as GDP data, PMI numbers, and industrial production figures to gauge market resilience amid global uncertainties, added Ajit Mishra from Religare Broking Ltd.