Indian markets brace for turbulent Monday as US strikes Iran nuclear sites

Oil markets had already been rattled. Brent crude surged nearly 3 per cent by June 19, as tensions rose between Israel and Iran touching around $78.85 a barrel.

After the US action, prices climbed further before retreating to about $76.96, as reports emerged that Washington might delay deeper intervention.

Also read | Trump’s attack on Iran, a ‘spectacular’ failure of US foreign policy

Disruption in oil supply

Equity markets are preparing for a turbulent Monday. Analysts note that global uncertainty, rising oil costs, and inflows into safe-haven assets could trigger risk‑off sentiment on Dalal Street.

Analyst Devarsh Vakil from HDFC Securities offered a measured assessment. “Markets are pricing in escalation risks by the hour,” he said, while pointing to Nifty support levels near 24,900 and resistance around 25,222, even as foreign investors prepared to withdraw funds.

Support and resistance levels are like the floor and ceiling of a stock’s price; support is where prices tend to stop falling, and resistance is where they often stop rising.

Oil vulnerability

Oil remains at the heart of India’s vulnerability. Nearly 20 million barrels per day transit the Strait of Hormuz. Any disruption there could propel Brent to $100 a barrel, possibly even $120 in extreme scenarios.

Also read: All eyes on Strait of Hormuz, but India needs to watch its oil vulnerability

Phil Flynn of Price Futures Group warned of that risk: “If Iran closes the strait, 100-dollar oil is inevitable.” He explained that Iran’s threat to disrupt Hormuz had rattled markets.

Bernstein analysts in a report echoed the urgency. “There’s no buffer left,” they said, pointing out that India’s gas imports rely heavily on that corridor and that oil shocks tend to linger.

Weakening rupee

Currency markets were similarly tense. By June 20, the rupee weakened to around 86.63 per dollar, its weakest level in three months, amid elevated oil prices and investor caution. It briefly slid to about 86.89 before hovering near 86.58 late in the week, after signals that Washington would delay further military decisions for up to two weeks.

Combined pressures from tariffs and inflation risk plunging the world into stagflation if the conflict continues past July

The Reserve Bank of India had already reacted. After the earlier spike in oil prices around June 13, the rupee weakened to approximately 86.20, prompting RBI sales of dollars to stabilise markets. Analysts warned of broader economic consequences.

Impact on inflation

A barrel strike at $100 or more would worsen inflation and deepen the current account deficit. Citi economists predicted that disruption of 1.1 million barrels per day of Iranian supply could raise Brent to $75–78. Any protracted closure of Hormuz would send it toward $120–130.

Citigroup added that combined pressures from tariffs and inflation risk plunging the world into stagflation if the conflict continues past July.

Also read: The multiple casualties of US attack on Iran

A Bernstein report underscored the constraints facing India: pipelines through Saudi Arabia and the UAE bypass only about a fifth of current Hormuz traffic, offering little relief. Auto makers, consumer goods companies, and chemical manufacturers may suffer the most.

Over the weekend, analysts agreed volatility would remain high and for now it is a wait-and-watch situation.