FX.co ★ Sensex, Nifty Set For Weak Start After Iran's Attack

On Monday, shares in India are predicted to open with a drop as investors balance out the strong Q4 earnings from TCS with the escalating geopolitical tensions following the historic attack by Iran on Israel over the weekend.

G-7 leaders took a firm stand on Sunday, firmly denouncing Iran's direct and unprecedented attack on Israel, warning this could lead to an uncontrollable regional escalation. Meanwhile, as the conflict in Gaza continues, the Israeli government has received a new ceasefire proposal from Hamas.

The United States has declared it will not partake in any of Israel's retaliatory attacks against Iran. The current concern among investors is whether this conflict will evolve into a widespread regional war. It is widely speculated that any further escalation could push the oil price above $100 a barrel.

The holiday on Wednesday for Ram Navami, combined with the anticipated earnings reports from Bajaj Auto, Infosys, and Wipro later in the week, could affect trading in this truncated week.

Following the S&P 500's worst session since January on Friday, Asian markets opened with steep drops this morning while U.S. stock futures saw a marginal increase. The dollar maintained its largest weekly gain since 2022, with gold unable to reach last session's record high and oil prices mixed following Israel's announcement that Iran's attack caused limited damage.

Amidst escalating geopolitical tensions, inflation worries, and disappointing earnings and guidance from leading banks, U.S. stocks experienced a significant fall on Friday. The shortcomings in U.S. consumer sentiment in April were paired with increased inflation expectations for the coming year and beyond.

On Friday, the Dow fell by 1.2%, the S&P 500 dropped 1.5%, and the tech-heavy Nasdaq Composite declined 1.6%. European stocks had mixed results on the same day, with some early gains lost after the European Central Bank hinted at a probable June interest rate cut. The pan-European STOXX 600 saw a marginal increase of 0.1%. The UK's FTSE rose by 0.9%, while Germany's DAX and France's CAC 40 slipped 0.1% and 0.2%, respectively.