NEW DELHI: Despite rising global uncertainty fueled by escalating Middle East tensions, Indian markets demonstrated remarkable resilience. Wholesale Price Inflation falling to 0.39% in May from 0.85% in April also boosted sentiments. On Monday, the BSE Sensex surged 677.55 points (0.84%) to close at 81,796.15 while the NSE Nifty 50 rose 227.90 points (0.92%) to settle at 24,946.50.
The geopolitical landscape worsened as Iran launched a severe air strike at Israel during the weekend. Iran’s response came after Israel launched a military strike on Iran which targeted its nuclear facility and killed high-profile generals and scientists. The war between the two nations has sparked fears of oil supply disruptions and regional instability, rattling investors worldwide.
Harshal Dasani, Business head, INVasset PMS said that the Israel–Iran conflict, while serious, has not materially disrupted global trade or economic activity. “As clarity emerged and worst-case scenarios were ruled out, markets bounced back. Investors are again viewing dips as opportunities, with capital rotating into domestic themes that are largely insulated from global geopolitical shocks,” added Dasani.
He further stated, “We’re seeing renewed strength in internal consumption-driven sectors—especially energy, power, defence, and capital expenditure-linked plays—which remain structurally intact. These areas benefit from long-term policy support, strong demand visibility, and minimal dependence on external macro conditions.”
“Moreover, corporate earnings remain resilient, recession fears have eased, and central banks like the Fed are maintaining a steady rate stance. This trifecta—stable policy, strong earnings, and sectoral rotation—is reinforcing the “buy-on-dip” behaviour we’re witnessing.”
Meanwhile, most analysts have warned investors to remain alert. Vinod Nair, Head of Research, Geojit Investments said that geopolitical developments in the Middle East are likely to influence near-term market sentiment, with any signs of de-escalation being closely monitored.
Ajit Mishra, SVP, Research, Religare Broking Ltd said that while the market's resilience amid lingering geopolitical tensions is encouraging, participants should remain cautious and not get carried away by a single-day rebound, especially as the index approaches the upper band of its current consolidation range, i.e., the 25,000–25,200 zone. “We recommend maintaining a stock-specific trading approach, given the mixed trends across sectors, with a preference for relatively less volatile counters,” added Mishra.
Sectorally, IT, metal, realty, and oil & gas indices surges over 1% gains. In the broader market space, Nifty Midcap and Nifty Small cap indices recovered from intraday lows to post gains of nearly 1% by the close.
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