New Delhi, February 28: Increasing geopolitical tensions in the Middle East could affect the Indian stock market, as well as global markets, according to market experts.
Experts noted that the escalating conflict between Israel and Iran may prompt investors to adopt a cautious approach. However, instead of a panic sell-off, a weak market opening is anticipated.
Concerns heightened after Israel conducted “preventive attacks” on Iran, significantly escalating tensions in the region. Reports indicated multiple explosions in Tehran, targeting various areas of the Iranian capital.
In response, the Israeli Defense Forces announced on social media platform X that sirens were sounded across Israel, and citizens received preemptive alerts on their mobile phones, advising them to seek safety. The military described this as a precautionary measure to prepare the public for potential missile attacks.
Market analysts suggest that such geopolitical risks typically have a negative short-term impact on stock markets, as investors tend to shift towards safer investment options. However, they also pointed out that the Indian market had already experienced significant selling pressure during Friday’s trading session.
As a result, the likelihood of a substantial decline or a significant gap down at the market’s opening on Monday appears low.
Analysts believe that the atmosphere on Dalal Street will remain cautious. Trading may occur within a limited range or with slight declines, as investors await clarity on potential negotiations between the U.S. and Iran.
They anticipate that the initial market reaction may be limited, but if tensions escalate further, volatility could persist.
From a technical perspective, experts noted that the Nifty 50 index closed below its 200-day exponential moving average (EMA), indicating signs of weakness.
One expert commented, “The index has formed a fourth consecutive bearish candle, signaling medium-term weakness and a negative trend.”
Technically, the Nifty 50 is facing immediate resistance at the 25,300-25,350 level, while strong support is observed between 25,000-25,050.
An analyst stated, “If the index holds above the support level, some stability may return. However, if this level breaks, selling pressure could intensify.”
– DBP/
