Indian equity markets opened on a weak note on Friday, dragged down by rising tensions in the US-Iran conflict and a surge in crude oil prices, which continued
to weigh on investor sentiment. The Nifty 50 slipped below the 23,050 mark, while the BSE Sensex fell more than 900 points in early trade. At around 9:16 AM, the Nifty was trading at 23,045.55, down 261 points or 1.12%, while the Sensex stood at 74,438.18, lower by 835 points or 1%. Market participants are closely tracking developments around the ongoing conflict and its impact on global energy prices. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the uncertainty is unlikely to ease anytime soon. "The on and off reaction of the market to news and events regarding the war is likely to continue in the near-term. The spike in Brent crude back to around $108 level will again trigger another round of risk-off in the Indian market." He added that recent corrections have made valuations more reasonable, but risks remain. "The market correction since the war began has brought down Nifty valuations to fair levels. Nifty is now trading at about 19 times, which is lower than the last 10-year average of 22.4 times. But if India’s macros take a hit due to this energy crisis, valuations may again decline factoring-in the feared hit to earnings growth in FY27." According to him, the broader outlook will depend largely on how long the conflict lasts. "The Indian economy is strong enough to absorb the shock if the war ends, crude cools down and gas availability becomes normal. But if the war prolongs, crude remains elevated for months together, and gas availability constraints continue, the stress on India’s macros will be significant and the market will discount that." Global cues remained weak, adding to the pressure. US markets ended sharply lower, with the Nasdaq Composite falling more than 2%, while the S&P 500 and Dow Jones declined over 1% each, as investors moved towards safer assets. The cautious mood also spread to Asian markets. Despite fresh signals from Donald Trump extending the deadline for Iran to reach an agreement, traders remained wary of further escalation. Back home, foreign institutional investors (FIIs) continued to offload equities, selling shares worth Rs 1,805.37 crore on Wednesday. However, domestic institutional investors (DIIs) provided some support, buying equities worth Rs 5,429.78 crore.
