Rs 11 lakh crore gone! Middle East tensions, the ongoing war of the US and Israel with Iran have bled the Indian stock markets, with investors rushing for cover to safe haven assets as economic and geopolitical uncertainties mount the world over. Indian equity markets have come under heavy pressure in recent sessions, with the benchmark Sensex and Nifty sliding more than 2.5% each over two straight trading days. Both indices extended losses on Monday after Iran responded to strikes by Israel and the United States that killed its supreme leader Ayatollah Ali Khamenei over the weekend. The Sensex plunged by more than 1,000 points, slipping below the 81,000 mark for the first time in over a month. The Nifty 50 also dropped sharply, losing upwards of 300 points and falling beneath the crucial 25,000 support level.
What’s the outlook for Nifty & Sensex?
Market experts anticipate continued turbulence in the near term as tensions between Iran and the Israel-US alliance intensify without any visible diplomatic breakthrough. Despite the current uncertainty, analysts maintain that the longer-term prospects for Indian equities remain constructive.Tanvi Kanchan, Associate Director at Anand Rathi Share & Stock Brokers, said near-term conditions are likely to remain choppy. She pointed to the steep jump in the India VIX, which climbed over 25 per cent to 17.13 on Monday, as a clear indicator of heightened uncertainty and investor risk aversion.“Gold futures rose sharply on MCX as safe-haven demand surged. Elevated crude is a fiscal headache, but RBI has room to manoeuvre, and domestic consumption remains resilient. IT stocks face additional pressure from the Anthropic-driven AI model disruptions rattling US tech sentiment. Banking stocks need to be watched for yield curve dynamics,” the analyst told ET.
Stock market crash unlikely to alter long-term path
Although steep market declines can be unsettling, Tanvi Kanchan of Anand Rathi Share & Stock Brokers noted that such corrections have not historically disrupted India’s broader growth trajectory. She underscored that the country’s domestic macroeconomic fundamentals remain intact. Net GST collections stood at Rs 1.71 lakh crore in January 2026, earnings recovery is anticipated in FY27, and quarterly performances from PSU banks and metal companies have been encouraging.Vikram Kasat, Head Advisory at PL Capital, said that despite short-term challenges, underlying economic indicators continue to display resilience, supported by stable earnings expectations and sustained systematic investment plan inflows. “However, we expect markets to remain headline-driven in the near term, with crude trajectory and geopolitical cues likely to dictate sentiment. Investors should stay selective and focus on quality balance sheets and earnings visibility,” he said.Naval Kagalwala, COO and Head of Product at Shriram Wealth, observed that geopolitical flare-ups such as escalating tensions in the Middle East have occurred repeatedly in the past, typically triggering temporary volatility followed by eventual stabilisation.“Any correction, if it plays out, could help rationalise valuations further in India, which continues to remain among the fastest-growing major economies. Importantly, this is not an India-specific event. Near-term spillovers, if any, would largely be through a spike in oil prices and certain other segments which rely on exports-imports,” he added.Ajit Mishra, Senior Vice President of Research at Religare Broking, advised a guarded approach in the near term. He suggested keeping exposures modest and prioritising strict risk management practices.Rupak De, Senior Technical Analyst at LKP Securities, noted that the Nifty has slipped beneath its rising trendline on the daily chart, signalling mounting bearish sentiment. He added that the RSI remains in a negative crossover, reinforcing signs of weakening momentum.He identified 24,600 as immediate support, cautioning that a clear breach below this mark could lead to a sharper correction. “On the higher side, resistance is seen at 25,000. Until the Nifty sustains above 25,000, overall sentiment is likely to remain tilted in favor of the bears,” he said.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)