Middle East Tensions Likely to Influence Indian Stock Market Sentiment This Week

Mumbai — Persistent geopolitical tensions in the Middle East are expected to significantly influence sentiment in the Indian stock markets this week, with analysts warning of potential volatility in trading.

The development comes after Kuwait announced a halt in oil production and refining output because tankers are unable to safely transit the Persian Gulf amid threats from Iran. The Arab nation described the reduction as a precautionary measure, though it did not disclose the scale of the production cut.

Market experts say global investors are increasingly concerned about the possibility of commodity-driven inflation, which could complicate decisions for central banks and monetary policymakers.

During the previous week, Indian equity markets remained volatile and experienced sustained selling pressure. The Nifty 50 ended the week at 24,450, while the BSE Sensex closed at 78,919 — both declining 2.9 per cent on a weekly basis. The Nifty Bank settled around 57,783, falling 4.5 per cent and underperforming the broader market.

Rupak De, Senior Technical Analyst at LKP Securities, said the technical outlook remains weak.

“Technically, the index is still trading below its previous swing low, suggesting continued bearish momentum. In the near term, the index may slide further, potentially moving toward 24,000 or even lower,” he noted.

He added that the key resistance level is around 25,000, and unless the market decisively breaks above this mark, the prevailing trend may favour a “sell-on-rise” strategy.

Ajit Mishra, Senior Vice President for Research at Religare Broking, said investors may find selective buying opportunities in sectors such as pharmaceuticals, defence, public sector enterprises (PSEs), and select metals and energy stocks.

However, sectors like banking, real estate, information technology and some FMCG stocks could remain under pressure, he added.

Investors will also closely monitor global developments, crude oil prices and India’s Consumer Price Index (CPI) data scheduled for March 12, which will provide insight into inflationary trends following the recent surge in crude oil prices.

Additionally, foreign exchange reserves data will be watched to assess the strength of India’s external financial buffers.

Last week, Saad al-Kaabi, the energy minister of Qatar, warned that if the conflict in the Middle East continues even for a few days, Gulf exporters might declare force majeure and halt deliveries. Such a scenario could push oil prices to around $150 per barrel and natural gas prices to $40 per MMBtu within weeks.

— With inputs from IANS