Nifty and Sensex dipped after President Trump warned Iran of “unconditional surrender,” spurring fears of deeper conflict
Geopolitical Risk Trigger Caution
Trump’s Iran Remarks Trigger Caution – Indian stock markets opened in negative territory on June 18, as heightened geopolitical tensions between the United States and Iran weighed on global investor sentiment. The Nifty 50 declined by 65 points to open at 24,797.15, while the BSE Sensex slid 269 points to 81,313.9. These declines reflected a broad-based market unease after U.S. President Donald Trump demanded Iran’s “unconditional surrender” in the wake of escalating regional tensions.
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The statement followed reports of Israel’s growing air dominance over Iran and the continued friction following a wave of retaliatory strikes. Even though Iran has suffered the loss of key military figures, much of its missile and nuclear infrastructure remains intact—raising concerns about a prolonged conflict.
Markets across Asia mirrored this caution. Hong Kong’s Hang Seng and Singapore’s STI edged lower, while Japan’s Nikkei and South Korea’s KOSPI remained mixed. Back home, sectoral indices like Nifty Auto, IT, and Metal saw moderate declines.
Oil Prices and Inflationary Fears Add to the Strain
The spike in Brent crude oil prices added fuel to investor anxiety. India, which imports more than 80% of its oil, is particularly vulnerable to sharp increases in crude costs. Any sustained rally in oil prices threatens to strain the fiscal deficit, weaken the rupee, and stoke inflationary pressures, factors that directly impact company earnings and consumer demand.
According to market strategist Ajay Bagga, the key concern isn’t just Iran’s response but whether the United States might step in with a military campaign targeting critical Iranian installations. “If that happens, oil markets could go into panic mode temporarily,” he told ANI. While such escalation could lead to long-term stability in theory, the near-term volatility is what spooks investors.
India’s central bank, already battling sticky inflation, might be forced to recalibrate its stance if crude prices remain elevated. This clouds the outlook further for rate-sensitive sectors and consumer sentiment.
Defensive Strategy Dominates as Volatility Rises
The India VIX, a benchmark for market volatility, rose marginally, signalling growing caution. While sectors like Media and Realty showed relative resilience, most others slipped into the red. Analysts note that investors may adopt a “buy the dip” strategy if tensions cool and fundamentals remain robust, but for now, the mood remains defensive. From a technical viewpoint, Nifty faces resistance near 25,070 while support rests around 24,800. A sustained break below this level could open the door for deeper corrections, especially if global cues remain hostile
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