US, Israeli attack on Iran: What Indian market investors need to know and the risk to be aware of

SENSEX, NIFTY50 today: The latest geopolitical tensions between Iran, the US, and Israel are expected to weigh on investor sentiment in India when trading resumes on Monday, March 2.

According to multiple media reports, the United States and Israel early Saturday launched coordinated military strikes against Iran, marking a significant escalation in Middle East tensions.

Explosions were heard in Tehran and other parts of the country as Iranian airspace came under attack, with both nations saying the operation targets Iran’s military infrastructure and nuclear-related capabilities.

US President Donald Trump said in a video message that Washington had begun “major combat operations” in Iran to eliminate what he described as imminent threats from the Iranian regime and to prevent Tehran from obtaining nuclear weapons.

Israeli officials characterised their action as a pre-emptive strike aimed at neutralising security threats.

Iran has vowed a decisive response, and initial reports indicate retaliatory missile launches by Iranian forces.

The situation remains fluid, with global leaders calling for de-escalation amid the rapidly evolving conflict.

What to expect when markets open on Monday, March 2

Analysts expect the stock market to witness a knee-jerk reaction at the open if the geopolitical situation remains unchanged. The week ahead is likely to remain volatile, with escalating tensions in the Middle East coinciding with a packed calendar of key macroeconomic data releases in both the US and India.

However, any signs of de-escalation may trigger a relief rally.

What is the ongoing trend in the Indian market?

Indian equities have remained volatile in recent weeks, frequently surrendering early gains as key indices struggle to break past earlier peak levels, indicating strong resistance at higher zones.

Uncertainty surrounding US President Donald Trump’s tariff threats, AI-related valuation concerns, and persistent geopolitical tensions have kept market participants on edge for an extended period.

Oil: The key risk

Crude oil prices are expected to spike if shipments are rerouted away from the Strait of Hormuz, forcing vessels to take longer routes around Africa — a development analysts warn would be a significant setback for India, given that crude oil remains the country’s largest import.

Experts highlight the Strait of Hormuz as the most critical flashpoint in any potential conflict with Iran. The narrow waterway handles nearly 20% of global oil supply, and markets have yet to fully price in the risk of a disruption. While there are currently no immediate signs of a blockade, the risk remains closely watched.

Should the Strait of Hormuz be shut, oil prices could surge sharply towards $100 per barrel, according to reports.

For India, the stakes are particularly high as, according to available reports, nearly 50% of its crude imports and about 60% of LNG imports pass through the Strait. Any disruption would have swift and significant macroeconomic implications.