The war between Israel and Iran has entered its fourth day, and for now, remains confined to aerial combat. Missiles, rockets, drones, and bomber aircraft are still in action, with no signs of de-escalation. Both sides have reportedly suffered significant damage and casualties. While there are whispers of behind-the-scenes efforts to end the war, nothing seems close to materialising.
One of the biggest fears triggered by the conflict was the potential for oil prices to skyrocket. However, that anxiety seems to have eased for now. Brent crude is still hovering close to $75 per barrel, suggesting that the market is regaining some calm. Gold prices too have mostly stabilised. Unless there is some serious mishap involving a nuclear facility, markets are expected to stay relatively composed.
Asian markets, except China, saw gains on June 16, and US futures also edged up. The Indian market was expected to open higher as well. Gift Nifty had closed at 24,743 the previous night and opened slightly higher at 24,799 before pulling back slightly. This movement hinted at a positive start for domestic markets.
European indices, on the other hand, had ended Friday with nearly 1% losses. Soaring crude prices and the escalating conflict in West Asia had particularly hurt auto stocks.
On Friday, the US markets too closed sharply lower. Apart from crude price concerns, fears that America may slowly get dragged into the war also weighed heavily. Aviation, auto, and travel stocks all took a hit, while energy and mining stocks gained. The Dow Jones dropped 769.83 points (1.79%) to settle at 42,197.79. The S&P 100 fell 68.29 points (1.13%) to 5,976.97, while the Nasdaq Composite slid 255.66 points (1.30%) to close at 19,406.83.
US futures began the new week in the green, with the Dow up by 0.07%, the S&P rising 0.10%, and the Nasdaq climbing 0.15%.
Asian markets opened strong on Monday, with Japan’s Nikkei jumping over 0.75%. However, indices in Hong Kong and China traded lower.
West Asian tensions pulled Indian indices lower as well. The session began with steep declines of over 1.5%, but as oil prices eased—retracing from a 12% spike to a 7% gain—the domestic market managed to recover part of the losses.
Sectors like real estate, healthcare, IT, and media managed marginal gains. On the flip side, FMCG, banks, financials, metals, oil, and consumer durables all closed in the red.
The Nifty dropped 169.60 points (0.68%) to end at 24,718.20. The Sensex lost 513.38 points (0.70%), closing at 81,118.60. Bank Nifty slipped by 555.20 points (0.99%) to 55,527.35. The Nifty Midcap 100 fell 213.40 points (0.37%) to 58,227.45, while the Smallcap 100 dropped 90.25 points (0.49%) to 18,374.80.
The broader market breadth was tilted in favour of declines. On the BSE, 1,401 stocks advanced, while 2,595 fell. On the NSE, 1,059 stocks rose, compared to 1,822 that declined.
There were 43 stocks on the NSE that hit a 52-week high, while 34 touched their 52-week low. A total of 54 stocks hit the upper circuit, whereas 80 were locked in the lower circuit.
Foreign investors continued to pull out, selling ₹1,233.47 crore worth of shares in the cash segment on Friday. Domestic funds, meanwhile, bought equities worth ₹2,906.13 crore. In June so far, foreign portfolio investors have withdrawn ₹5,402 crore from Indian markets.
Nifty touched a support level near 24,450 and bounced back. If this level is breached, a deeper correction could follow. Analysts believe Nifty might consolidate between 24,450 and 25,000 in the coming days. For the current session, support is seen at 24,545 and 24,475, while resistance may appear at 24,760 and 24,825.
The Israel-Iran war and a weakening US dollar have once again turned gold into a sought-after safe haven. On Friday, gold jumped 1.5% to close at $3,433.40 an ounce. Prices continued to climb early Monday, reaching $3,452 before retreating slightly to $3,438. The trajectory of the war and signals from the US Federal Reserve are likely to influence gold prices this week.
In Kerala, gold prices surged by ₹1,560 on Friday and another ₹200 on Saturday, pushing rates to an all-time high of ₹74,560 per sovereign.
Silver also hit a record high, priced at $36.22 per ounce.
Most industrial metals closed lower on Friday. Copper fell 1.24% to $9,657.50 per tonne. Aluminium was down 0.26% at $2,503.00. Nickel gained, but lead, zinc, and tin all declined.
Natural rubber on the international market rose by 1.06%, reaching 161.70 cents per kilogram. Cocoa dipped slightly by 0.11% to $9,790.47 per tonne. Coffee was up by 0.85%, while tea prices jumped dramatically by over 703%. Palm oil prices increased by 2.27%.
The US dollar made slight gains as global investors sought safety amid the war. Still, it failed to recover all of last week’s losses. The dollar index, which had closed at 98.18 on Friday, ticked up to 98.26 early Monday.
In currency markets, the euro weakened to $1.154, the pound slipped to $1.354, and the Japanese yen traded at 144.53 per dollar.
Yields on US 10-year bonds inched up, touching 4.422% on Monday as bond prices dipped slightly.
The rupee weakened on Friday, falling by 48 paise to close at ₹86.08 against the dollar.
China’s yuan also declined, settling at 7.18 yuan per dollar.
Fears that the Israel-Iran war would damage oil fields, storage hubs, pipelines, and refineries initially drove crude oil prices up. On Friday, prices soared by up to 12%, before settling at a 7% gain by the end of the day.
By Monday morning, prices were up around 3% before pulling back again. Brent crude was trading at $74.50 per barrel, WTI at $73.29, and Murban crude at $74.02. Natural gas prices rose 2.5%.
