Israel Strikes Iranian Nuclear Facilities Amid Market Turmoil

Israel has struck Iranian nuclear targets, including Iran’s primary uranium enrichment facility. Iranian media and witnesses reported explosions at multiple sites and confirmed the killing of Revolutionary Guards Chief Salami in the strike.

Israel declared a state of emergency anticipating Iranian retaliation through missile and drone strikes. Global markets plunged in early Asian trading as investors fled to safe havens. Oil prices surged to two-month highs amid concerns about potential supply disruptions. U.S. stock futures dropped by more than 1%, while the dollar, yen, and Swiss franc strengthened in tandem with gold and Treasuries.

The strike escalates Middle East tensions in a key oil producing region, exacerbating existing pressure on global markets from President Trump’s trade policy overhauls. On the trade war front, President Trump announced he will send letters to trade partners within two weeks detailing new tariff rates. He expressed willingness to extend the 90- day tariff pause, which is set to expire early next month, but believes an extension won’t be necessary.

Indian shares fell sharply on Thursday as trade uncertainties and heightened geopolitical risks overshadowed hopes for robust growth. The Nifty broke a six-session winning streak by falling 253 points, or 1%, to close at 24,888. The Indian rupee was the worst-performing Asian currency on Thursday, battered by risk-averse sentiments and a surge in crude oil prices driven by geopolitical concerns. Except for the Nifty healthcare sector, which ended slightly in the green, all other sectoral indices ended in the red.

Following an indecisive move on June 11, the Nifty has continued with a clear downward trend Wednesday, signaling further weakness in the market. Heightened geopolitical tensions and the Air India plane accident have dampened market sentiment, with stocks expected to open sharply lower.

Immediate support for the Nifty is seen around the 24,600- 24,500 range.

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Source: HDFC Securities Prime Research