Indian shares expected to open lower as Middle East tensions weigh on investor sentiment - Reuters reports
TL;DR
Indian shares are set to open lower due to Middle East tensions, which have spiked crude oil prices and triggered global risk-off sentiment. The conflict threatens oil supply disruptions, impacting India's import-dependent economy and shifting market focus from earnings to oil-driven trading.
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Indian shares expected to open lower as Middle East tensions weigh on investor sentiment - Reuters reports
Indian Shares Expected to Open Lower as Middle East Tensions Weigh on Investor Sentiment
Indian equity markets are poised to open lower on Monday, March 2, 2026, as escalating geopolitical tensions in the Middle East drive up crude oil prices and trigger a global flight to safe-haven assets, according to Reuters. The conflict between Iran and Israel, which intensified over the weekend with U.S.-Israeli strikes reportedly killing Iran's Supreme Leader Ali Khamenei, has heightened fears of supply disruptions. Brent crude futures surged to $82.40 per barrel—the highest level in 14 months—while Tehran's closure of navigation through the Strait of Hormuz, a critical oil transit route, has further amplified concerns.
The Nifty 50 benchmark is expected to open below its previous close of 25,178.65, with futures trading at 24,132 points as of 6:50 a.m. IST. Analysts note that India's heavy reliance on oil imports—over 40% of which transit through Hormuz—makes the economy particularly vulnerable to prolonged price spikes. "Markets are likely to shift from earnings-driven to oil-driven trading," said Venkatesh Balasubramaniam of JM Financial, adding that higher crude prices could elevate inflation, push bond yields higher, and compress equity valuations.
Sector-wise, oil marketing companies, aviation firms, and chemical manufacturers are expected to underperform due to rising input costs, while oil explorers like ONGC and Oil India may benefit from higher crude prices. Meanwhile, global risk-off sentiment has led to a 1.1% decline in Asian markets, with Indian shares already logging a third consecutive monthly loss ahead of the weekend's geopolitical escalation.
Foreign portfolio investors (FPIs) offloaded ₹75.36 billion worth of equities on Friday, though domestic institutional investors remained net buyers. Analysts caution that the market's near-term trajectory will depend on the duration of the conflict, crude price trends, and domestic macroeconomic data, including Q3 GDP and auto sales figures.
As uncertainty persists, investors are advised to monitor energy markets, geopolitical developments, and central bank policies for cues on risk appetite and portfolio allocations.
