Markets End in Red Amid Middle East Tensions

The Indian equity markets ended lower for a second consecutive session on June 13, weighed down by heightened geopolitical tensions after Israel’s military strike on Iranian nuclear sites. Although the benchmark indices recovered from the day’s low, the overall sentiment remained under pressure due to the sharp spike in crude oil prices.

The BSE Sensex fell 573.38 points, or 0.70%, to close at 81,118.60, while the Nifty 50 dropped 169.60 points, or 0.68%, to 24,718.60. Despite the weakness in the headline indices, the broader markets outperformed, with the BSE Midcap and Smallcap indices down only 0.3% each.

For the week ended June 14, the Sensex fell 1.3% and the Nifty shed 1%.

Crude Oil Surge Fuels Market Jitters

Crude prices jumped more than 7% during early trade on Friday, marking the highest levels in over two months. This came after Israel launched air strikes on Iranian nuclear installations, prompting Tehran to vow a ‘harsh response’, according to Reuters.

The oil price surge sparked a selloff in crude-sensitive stocks and increased volatility across equity markets. Shares of companies in sectors such as aviation, oil & gas, and FMCG came under pressure. Defence stocks, however, gained ground amid hopes of increased government orders in light of the growing uncertainty.

Sectoral Snapshot and Stock Movers

All sectoral indices ended in the red except media, with FMCG, PSU Banks, oil & gas, power, and telecom falling between 0.5–1%.

Top Nifty losers included:

• Adani Ports

• ITC

• SBI

• IndusInd Bank

• Hindalco Industries

Top Nifty gainers were:

• Bharat Electronics

• ONGC

• Tech Mahindra

• TCS

• Wipro

Shares of Canara Bank shed 3.5% after it announced plans to raise ₹9,500 crore via bonds. Meanwhile, Kernex Microsystems surged 5% after its JV received a Letter of Award (LoA) worth ₹311 crore, and Talbros Automotive Components gained 2.5% on winning multi-year orders worth ₹580 crore. Gensol Engineering shares hit a 52-week low after the NCLT admitted IREDA’s insolvency plea.

Nearly 80 BSE stocks touched 52-week highs, including names like:

• Narayana Hrudayalaya

• Manappuram Finance

• Max Healthcare

• Muthoot Finance

• AstraZeneca Pharma

• JK Cement

Global Market Overview

In the US, stock markets closed higher on Thursday, boosted by strong earnings guidance from Oracle, which lifted sentiments around artificial intelligence stocks. However, futures and Asian markets slipped on Friday as reports of Israel’s strike on Iran spooked global investors.

Indian CPI Falls to 75-Month Low

In a silver lining, India’s retail inflation eased to 2.82%, its lowest level in 75 months, offering a potential cushion to equities in the near term. The fall in Consumer Price Index (CPI) may help the RBI maintain a growth-supportive stance, although inflation from crude-related pass-through remains a concern.

Technical Analysis and Outlook for June 16

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, observed that Nifty formed a short-term top reversal at 25,222. While the trend is weak in the short term, the medium-term trajectory remains positive. He expects the index to trade within a broad range of 24,500–25,100. A break below 24,500 could trigger a sharp fall, while sustained support could see a bounce back toward 25,100.

Ajit Mishra, SVP – Research at Religare Broking, advised caution, noting the index has slipped below the 20-day EMA. He suggests maintaining a balanced trading approach, focusing on stock-specific opportunities driven by sectoral trends, while avoiding aggressive bets.

Rupak De, Senior Technical Analyst at LKP Securities, mentioned that Nifty found support near recent consolidation lows and staged an intraday recovery. A sustained move above 24,700 could take the index back to 25,000, while a fall below this level might lead to renewed selling.

Crude Oil and Middle East Risk Remain Key Drivers

The escalating Middle East crisis and a potential blockade of the Strait of Hormuz by Iran could pose serious risks to global energy supplies. A significant portion of India’s oil imports come from countries around the Strait, including Iraq, Saudi Arabia, UAE and Kuwait. Any disruption in the supply chain could lead to higher crude prices, shipping costs and inflationary pressures.

Aviation, Oil Importers Under Pressure

Indian oil marketing companies like IOC, BPCL, and HPCL have been hit hard, as they have not passed on the crude price increase to retail fuel consumers, squeezing marketing margins. Shares of these companies fell 1–2% intraday. Aviation stocks continued their decline after the Air India Dreamliner mishap on June 12.

In contrast, upstream companies like ONGC and Oil India rose on expectations of higher realisations due to crude’s rally.

Conclusion

As global tensions escalate, particularly in the Middle East, the Indian stock market may remain volatile. While cooling inflation and resilient domestic demand provide some comfort, crude oil price volatility and geo-political shocks are expected to drive short-term market moves.

Investors are advised to remain cautious, adopt a stock-specific approach, and stay alert to global developments, especially involving Iran, Israel, and OPEC nations.

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