As geopolitical tensions in West Asia escalate, the Indian stock market is set to experience some swings on the D Street today, June 16.
Iran’s recent ballistic missile attacks on Israel over the weekend have intensified investor anxiety. At 8:12 AM, the GIFT Nifty indicated a mildly positive start, trading at 24,807-up 57.50 points or 0.23%.
This follows a turbulent Friday where global equities, including Indian indices, witnessed a sharp sell-off after Israel launched airstrikes on Iran. The BSE Sensex plunged over 1,000 points intraday before paring losses to close at 81,118.60, down 573.38 points or 0.70%. The Nifty 50 mirrored the slide, ending at 24,718.60, down 169.60 points or 0.68%.
Global Risk-Off Mood Weighs on Sentiment
The fallout from the Iran-Israel confrontation triggered a global risk-off sentiment, with US markets closing deep in the red. The Dow Jones Industrial Average dropped 769.83 points or 1.79%, the S&P 500 shed 1.13%, and the Nasdaq Composite declined 1.30%.
Investor darlings like Nvidia took a hit, while oil and defence stocks surged on safe-haven buying and expectations of increased defence spending.
“Geopolitical tensions in the Middle East will clash with potentially supportive global monetary policy signals and easing trade tensions,” said Sugandha Sachdeva, Founder, SS WealthStreet.
“Markets have entered a risk-off mode. Volatility will remain elevated, with sentiment largely driven by geopolitical headlines,” added Sudeep Shah, Deputy VP & Head of Technical & Derivatives Research, SBI Securities.
Crude Oil Rally Sparks Inflation Concerns
Brent crude surged over 11% last week, its sharpest weekly gain since April 2024, closing at $73.198 per barrel. Fears of supply disruptions from the Middle East have reignited inflation concerns, especially for oil-dependent economies like India.
“Crude oil prices have already surged by 13% last week. If the conflict intensifies, it raises red flags for oil marketing companies, paint, cement, and logistics sectors,” said Sachdeva.
Shah also flagged a major technical development: “Crude oil has climbed above its 200-day EMA for the first time since January 2025. This is inflationary and signals tightening supply concerns.”
Fed Meeting Could Be a Turning Point
Market participants are now looking ahead to the US Federal Reserve meeting on June 18, which could bring a crucial shift in global risk sentiment.
“With signs of cooling inflation and manageable tariff impacts in the US, there’s growing hope the Fed might strike a dovish tone or hint at future rate cuts. That would boost liquidity flows to emerging markets like India,” said Sachdeva.
Additionally, the Dollar Index has slipped to a near three-year low, which is positive for Indian equities as it improves foreign investor sentiment.
Technical Outlook: Crucial Support at 24,500
Technically, the Nifty staged an intraday comeback on Friday, rebounding over 240 points after touching the 24,500-24,450 support zone. However, caution remains.
“The index is still trading below its 20-day EMA. RSI is indecisive. We’re in a no-man’s land between major support and resistance levels,” said Shah.
Key Levels To Watch Today
Support: 24,500-24,450. A breakdown could take Nifty to 24,200 or even 23,950.
Resistance: 24,850-24,900. A breakout here could fuel a rally toward 25,500.
“As long as Nifty holds 24,400-24,500, we expect recovery to 25,000. But a breakdown would be a strong bearish signal,” Sachdeva noted.
Sector Watch: IT and Pharma in Focus
Potential Winners
IT Sector: The Nifty IT index is outperforming, with HCL Tech and Tech Mahindra leading. “The sector is near its 200-day EMA with a bullish RSI,” said Shah.
Pharma & Healthcare: Defensive plays are gaining traction amid uncertainty.
Sectors Under Pressure
If tensions escalate further, certain sectors are likely to suffer:
Oil Marketing Companies (IOC, BPCL, HPCL): Crude spike threatens margins.
Aviation & Logistics: Higher ATF prices will dent profitability.
Auto & FMCG: Input costs and transport inflation may hurt demand.
Cement & Infrastructure: Energy-intensive operations may face margin pressure.
Today’s market open will be closely watched as geopolitical headlines from West Asia continue to dominate the investor psyche. While key support levels offer a short-term cushion, global cues, especially from the Fed meeting, will determine the medium-term trend. Traders are advised to stay nimble as volatility is here to stay.