At a time when headlines are dominated by conflict between Iran and Israel, domestic markets are choosing calm over chaos. On Monday morning, both benchmark indices opened firm despite geopolitical concerns, with the BSE Sensex rising 170.94 points to 81,289.54 and the NSE Nifty50 gaining 62.90 points to trade at 24,781.50 as of 10:19 am.
This quiet confidence comes even as gold prices climb, and crude oil remains in focus. So, what’s shielding Indian equities from the global shockwaves?
RISK-OFF, BUT NO PANIC
“The uncertainty stemming from the Israel-Iran conflict has created a risk-off in global markets,” said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “The safe-haven buying is keeping gold firm, but interestingly there is no panic in equity markets. Markets will be severely impacted only if Iran closes the Strait of Hormuz, triggering a huge spike in crude. This appears to be a low probability event now.”
It’s a classic case of markets factoring in the worst — and not finding it convincing enough. With U.S. President Donald Trump hinting at de-escalation efforts over the weekend, and crude oil prices showing signs of stability, investors seem to be weighing risks carefully rather than reacting impulsively.
“BUY THE DIP” PSYCHOLOGY STILL INTACT
More than just resilience, there’s a sense that equity markets are adapting to recurring geopolitical shocks, and perhaps even learning to capitalise on them.
“Markets are getting habituated to geopolitical escalations,” said Kranthi Bathini, Director – Equity Strategy at WealthMills Securities. “Such tensions have often been short-term interruptions to rallies. Statements from the US administration about a possible de-escalation in the Iran-Israel conflict are also offering a pause to the correction. Crude has been stabilising, and some long-only money is getting channelised into the market. There’s cherry-picking happening at this point.”
That search for value is being fuelled by strong domestic liquidity. With sustained flows into mutual funds and relentless retail participation, the market’s floor remains intact even during global shocks.
FINANCIALS BACK IN FOCUS
Dr Vijayakumar believes this risk-off scenario may actually present an opportunity, especially in segments where valuations haven’t run away yet.
“Past experience tells us that times of uncertainty and risk-off are buying opportunities for long-term investors,” he said. “This time, the difference is that the risk-off hasn’t triggered a big selloff in equities. Sustained retail buying and mutual fund inflows will keep valuations elevated for a long time. Long-term investors can use this phase to buy relatively attractively valued stocks like financials.”
WHAT NEXT?
While the mood is steady for now, market watchers caution that volatility could return quickly if the situation in West Asia deteriorates or oil spikes dramatically. For the Nifty, technical watchers are eyeing the 24,700–24,800 zone closely. “We need to see Nifty holding the level of 24,700 in the medium to short term,” Bathini added.
For now, though, the Indian market appears to be moving forward with cautious optimism, not ignoring the smoke in the distance, but not fleeing from it either.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)