FPJ News Service mumbai

Investors remained cautious and key indices closed lower on Monday as Indian markets “will not be spared from the ramifications” of the dangerous Israel-Iran conflict. The retaliation after retaliation episodes continue to dampen market sentiments. After losing over 900 points, the 30-share index settled 511.38 points lower at 81,896.79. The 50-share NSE Nifty fell 140.50 points at 24,971.90.

Though the US bombing on Iran has worsened the crisis in West Asia, the actual impact on Indian markets, for the time being, is likely to be limited. The market assessment is that there are limits to what Iran can do against the US and Israel. That’s why the early market reactions have been muted. Even though the possibility of the closure of Hormuz Strait is a threat, it is important to understand that this has always been “only” a threat, and Iran has never blocked the Strait. The fact is that the closure of Hormuz Strait will harm Iran and its ally China more than anyone else.

The market construct continues to favour a ‘buy on dips’ strategy,” said veteran investment strategist Dr VK Vijayakumar. “On June 20, markets recovered in anticipation of easing Middle East tensions, following the US announcement of a two-week window to deliberate its involvement in the Israel-Iran conflict.

However, the unexpected US airstrike on Iran’s nuclear facilities over the weekend disrupted those expectations, triggering a sharp rise in crude oil prices and leading to consolidation in the domestic equity market,” Vinod Nair, Head of Research, Geojit Investments. HCL Tech, Infosys, L&T, M&M, Hindustan Unilever, ITC, TCS and Maruti were the biggest losers. Bajaj Finance, Bharat Electronics, Kotak Mahindra Bank were among the gainers.