Global Tensions Weigh on Indian Equity Markets Amidst US-Iran Conflict Concerns

Indian equity markets started Thursday on a declining trend as escalating fears of a potential US strike on Iran loomed large, casting a shadow over investment sentiments. The Nifty 50 index commenced at 24,803.25, registering a minor drop of 8.80 points or 0.04 percent, while the BSE Sensex saw an early loss of 40.72 points or 0.05 percent, opening at 81,403.94.

Experts cite the prospects of a worsening Middle East conflict and possible US involvement as prime instigators of this cautious mood among traders. According to Ajay Bagga, a seasoned Banking and Market Analyst, the current market dynamics are shaped largely by uncertainties surrounding Iran's potential response and the implications of US actions. In a scenario of heightened conflict, Bagga foresees substantial selling pressure enveloping global markets.

Meanwhile, within the US, President Donald Trump deliberated intensely with his National Security Council regarding strategic options, reflecting a divide within his administration. Although core constituents of Trump's MAGA supporters oppose overseas military engagements, some Republican factions endorse action against Iran. Despite these divides, Trump's cautious approach is informed by the previous US military entanglements in Iraq and Afghanistan, alongside a strategic pivot towards countering China's influence in the Indo-Pacific. In India's domestic markets, sectoral indices mirrored this cautious sentiment, with most opening in the red, except Nifty Realty. Broader market indices revealed mixed signals, with slight gains in Nifty Midcap 100, indicating a cautious investor outlook amidst broader geopolitical uncertainties.

(With inputs from agencies.)