Market experts believe the US-Israel’s combined attack on Iran is expected to hurt Indian stock markets which have already been bruised due to tariffs. While the likelihood of a prolonged, full-scale conflict remains uncertain, the situation continues to be marked by fragile ceasefire efforts and persistent strategic tensions.
Experts believe that amid the current geopolitical tensions, Indian equities are likely to gap down on Monday, while gold and silver prices may open higher.
Nilesh Shah, MD, Kotak Mutual Fund believes that A quick end to the campaign will see limited impact, but a prolonged conflict will result in adverse impact. “The Street will watch carefully the price of oil and gas as well as their availability,” he added.
For India, a country heavily dependent on crude oil imports, the immediate fallout will be mounting inflationary pressures driven by surging energy prices. Higher import bills could widen the current account deficit and place additional strain on the fiscal deficit, particularly through increased subsidy commitments.
On Friday, weighed down by geopolitical tensions and uncertainty surrounding US tariffs, the Sensex slumped 961.42 points, or 1.17%, to close at 81,287.19, while the Nifty fell 317.90 points, or 1.25%, to end at 25,178.65. In February, the benchmark indices declined by up to 1.19% — largely dragged lower by IT shares — marking their third consecutive monthly decline.
“Benchmark indices are expected to open lower, accompanied by heightened volatility as investors reassess geopolitical and commodity-related risks,” said Manoranjan Sharma, Chief Economist at Infomerics Rating. A short-term correction of around 1–1.5% is possible, with sectors such as automobiles, financials, and FMCG likely to face pressure, he added.
In contrast, IT companies and select export-oriented businesses may find relative support amid global risk aversion and a strengthening US dollar, Sharma noted.
Analysts at JM Financial said, “Indian markets are likely to see a gap-down opening with elevated volatility amid global risk-off sentiment.”
Sectoral Split
Sectors such as oil marketing companies, paints, tyres, aviation, and chemicals could face margin pressures due to higher input costs. Upstream oil producers such as ONGC and Oil India may benefit from stronger realisations, while defence stocks including HAL and BEL could see improved sentiment, analysts said.
Elevated geopolitical risks are also likely to drive investors toward traditional safe-haven assets such as gold and silver, with bullion markets widely expected to open higher. “Gold and silver prices are set to remain highly volatile, with a gap-up opening in the next session, as the Middle East conflict involving renewed US and Israeli military action against Iran continues to dominate global risk sentiment,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.
Alok Agarwal, Head – Quant and Fund Manager at Alchemy Capital, believes the conflict was not entirely unexpected and that a portion of its impact has already been priced in by the markets. However, he cautioned that if hostilities persist when markets reopen, a temporary knee-jerk reaction could occur, which, based on historical trends, may present a buying opportunity.
Advanced Expiry
He added that heightened uncertainty could further boost demand for safe-haven assets such as gold and silver.
The conflict in the Middle East also poses challenges for Indian derivatives traders, particularly weekly index options writers, said Vijay Bhambwani, proprietary trader.
With markets closed on Tuesday for the Holi festival, the weekly Nifty-50 options expiry has been advanced to Monday, March 2, 2026.
This means options writers — especially weekly index options writers — are likely to bear the brunt of any spike in statistical beta. “They have little choice but to close or roll over open positions at prevailing rates, and prices may be far from efficient,” Bhambwani said.