US-Iran war: The US and Israel carried out joint strikes on Iran on Saturday, reportedly resulting in the death of Iran’s Supreme Leader Ayatollah Ali Khamenei, who had led the country for over three decades.
In response, Iran launched retaliatory missile attacks targeting Israel and several Gulf nations — including Saudi Arabia, Bahrain, Qatar, Kuwait, and the United Arab Emirates — which host US military bases, according to media reports.
The escalating tensions in West Asia have intensified concerns that the US-Israel military action against Iran could spiral into a broader regional conflict.
This had raised concerns among investors about the impact on the Indian stock market on Monday. Market experts expect sentiment in the market to remain subdued amid continuing geopolitical tensions in the Middle East.
How will the US-Iran war impact the Indian stock market?
According to Manoranjan Sharma, Chief Economist at Infomerics Ratings, the Indian equity have already responded with risk-off sentiment.
Sharma further noted that the benchmark indices are expected to open lower, accompanied by heightened volatility as investors reassess geopolitical and commodity-related risks.
“A short-term correction of approximately 1–1.5% is possible, with sectors such as automobiles, financials, and FMCG facing downward pressure. In contrast, IT companies and select export-oriented businesses may find relative support amid global risk aversion and a strengthening US dollar,” Sharma said.
Meanwhile, VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, believes that the near-term impact will be negative.
“Medium-term impact on the market will depend on how long the conflict lasts. We don’t know the answer to this question. After crippling Iran, the US and Israel may make a strategic withdrawal. The market will react very negatively. In a weak market, upstream oil companies and defence stocks will do well,” Vijayakumar said.
Sectors in focus on Monday amid the US-Iran war
According to Seema Srivastava, Senior Research Analyst at SMC Global Securities, these sector will remain in focus on Monday amid the ongoing US-Iran war:
Oil and energy sector
Companies such as Reliance Industries, BPCL, HPCL, and IOCL may benefit from volatile crude prices.
Defence sector
Firms such as Bharat Electronics, HAL, and Bharat Dynamics could see increased demand due to heightened geopolitical tensions.
Gold and Financial Services sector
Safe-haven assets like gold and companies like Titan and Muthoot Finance may attract investors.
Textiles and Pharmaceuticals
Export-oriented sectors, including textiles and pharmaceuticals, may face challenges due to disrupted global supply chains.
Aviation and Logistics
Airlines like IndiGo and logistics companies may struggle with rising fuel costs.
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