Markets opened sharply lower on Friday morning, with the Sensex opening at 80,427.81 and is currently trading at 80,825.69, down 866.29 points, or 1.06 per cent from its previous close of 81,691.98. The Nifty also declined, falling 261.35 points or 1.05 per cent to 24,626.85 after opening at 24,473.00, compared to the previous close of 24,888.20, as escalating geopolitical tensions between Israel and Iran triggered a broad-based selloff across sectors.

The benchmark indices extended Thursday’s losses, with the Nifty down 1.05 per cent and the Sensex declining 1.06 per cent in early trading. The selloff was attributed to Israel launching pre-emptive strikes on Iran earlier in the morning, intensifying fears of a prolonged conflict in the Middle East that could disrupt global oil supplies.

“The Nifty fell over a per cent yesterday, as geopolitical tensions in the Middle East showed signs of erupting. As of this morning, Israel has launched pre-emptive strikes on Iran and that’s led to a broad-based risk-off across markets,” said Akshay Chinchalkar, Head of Research at Axis Securities.

The market sentiment remained cautious despite the Reserve Bank of India’s recent rate cut, with foreign institutional investors continuing their selling spree. FIIs have offloaded ₹3,549 crore worth of Indian equities in June so far, adding to market volatility.

“On this ominous Friday the 13th, markets are gripped by caution as bearish signals intensify—despite the RBI’s jumbo rate cut, banking stocks remain weak, and FIIs have sold ₹3,549 crore so far this June, contributing to continued volatility,” noted Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.

The selling pressure was broad-based, with only two stocks managing to post gains in the Nifty 50. ONGC emerged as the top gainer, rising 1.31 per cent to ₹251.12, while BEL gained 1.19 per cent to ₹392.00. Oil exploration companies like ONGC benefited from the surge in crude oil prices, which jumped over 10 per cent to $76 per barrel.

On the losing side, Adani Enterprises led the decline, falling 1.70 per cent to ₹2,499.30, followed by Power Grid Corporation dropping 1.83 per cent to ₹283.70. Kotak Mahindra Bank declined 1.94 per cent to ₹2,085.60, while Adani Ports fell 1.96 per cent to ₹1,410.60. Trent was among the worst performers, declining 2.02 per cent to ₹5,514.00.

The aviation sector remained under pressure following Thursday’s Air India crash near Ahmedabad airport. IndiGo and SpiceJet had declined 3 per cent and 1.5 per cent respectively in the previous session. “These developments could trigger a dip of up to 6-15 per cent in airline stocks, creating an opportunity for investors,” said VLA Ambala, Co-Founder of Stock Market Today.

Geopolitical tensions dominated market sentiment as Israel declared its operation against Iran would last several days. The escalation raised concerns about potential disruptions to oil supplies through the Strait of Hormuz, a critical global oil transit route.

“Sometimes bad news come in a flood. Close on the heels of the Ahmedabad air tragedy has come the news of Israel’s attack on Iran. The economic consequences of this Israeli strike can be profound if the attack and counter attack by Iran lingers long,” observed Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The commodity markets reflected the geopolitical tensions, with gold prices surging to six-week highs above $2,420 per ounce. “Gold prices extended their gains following Israel’s airstrikes on Iran earlier today, intensifying the already fragile geopolitical landscape in the Middle East,” said Aksha Kamboj, Vice President of India Bullion and Jewellers Association.

Crude oil futures witnessed their biggest single-day gain in months, with Brent crude flaring up by around 12 per cent to $78 per barrel. “Crude oil futures surged over 10 per cent to $76 per barrel, the highest in two months, as escalating tensions between Israel and Iran sparked fears of severe supply disruptions,” explained Rahul Kalantri, VP Commodities at Mehta Equities Ltd.

The oil price surge is expected to impact sectors that use oil derivatives as inputs, including aviation, paints, adhesives, and tyres. “Sectors that uses oil derivatives as inputs like aviation, paints, adhesives and tyres will be hit hard. Oil producers like ONGC and Oil India will remain resilient,” Vijayakumar added.

Technical analysts warned of further weakness in the near term. “We are of the view that as long as the market is trading below 24,920/81800, a weak sentiment is likely to continue. On the downside, it could slip to 24,650/81000,” said Shrikant Chouhan, Head Equity Research at Kotak Securities.

The market breakdown below the crucial 25,000 level on the Nifty has intensified selling pressure. “With bulls failing to defend 25029, we got the drop we were expecting in the 24800 - 24863 zone yesterday. The decline has entered inside the breakout pattern, which brings immediate support at 24800 into play,” Chinchalkar noted.

Adding to the uncertainty, US President Donald Trump has threatened to impose 55 per cent tariffs on China, while trade negotiations remain stalled. The combination of geopolitical tensions and trade war concerns has pushed investors toward safe-haven assets like gold and government bonds.

Market participants are closely monitoring developments in the Middle East and any potential retaliation from Iran. “Market attention will remain focused on the evolving conflict in the Middle East and any forthcoming response from China regarding the trade tensions. Any further escalation is likely to drive gold prices higher,” Kamboj stated.

With the Nifty finding support around 24,500-24,750 levels, analysts suggest a cautious approach. “The current market texture is volatile; hence, level-based trading would be the ideal strategy for day traders,” Chouhan advised. The market’s direction will largely depend on how the geopolitical situation unfolds and whether tensions escalate further.

Published on June 13, 2025