Following coordinated military strikes by the U. S. and Israel on Iran, global markets are reacting with increased volatility. The Dow Jones fell 521 points, the S&P 500 dropped 0.43%, and the Nasdaq shed 0.92% following the confirmed strikes. President Trump described the action as "major combat operations" aimed at dismantling Iran's missile capabilities and preventing nuclear weapon development.
The strikes have heightened concerns about potential disruptions to global oil supplies, particularly through the Strait of Hormuz. Some oil majors have already suspended shipments through the strait. Vishnu Varathan, Head of Macro Research at Mizuho, suggests oil prices are likely to remain elevated, with a potential premium of 10-25% even without a blockade. Christopher Wong, a strategist at OCBC, anticipates safe-haven assets like gold will see an upside, while risk assets could face initial volatility. Gold prices have already surged nearly 11% in February.
Escalating tensions are testing investor sentiment, with Indian equities expected to open sharply lower amid a risk-off mood. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, advises investors to remain invested and use corrections to buy on dips for the long term. Market expert Anuj Gupta recommends trimming existing positions and awaiting clarity before initiating fresh trades.
Dmitry Medvedev, Deputy Chairman of Russia's Security Council, commented that all negotiations with Iran were a cover operation. Norwegian Foreign Minister Espen Barth Eide stated that the attack, described by Israel as preventive, is not in line with international law, requiring an immediately imminent threat. The market's next moves will depend on the scope of Iran's retaliation, potential disruptions in the Strait of Hormuz, and the opening of equity futures.
