Indian equity markets reversed early gains and slipped into the red by afternoon trade on Tuesday, June 18, as rising geopolitical tensions and caution ahead of the U.S. Federal Reserve’s policy decision weighed on investor sentiment.
At 12:25 PM, the benchmark Sensex was down 231.45 points or 0.28% at 81,351.85, while the Nifty fell 60.60 points or 0.24% to trade at 24,792.80. Broader market sentiment remained negative, with 1,466 stocks advancing, 1,879 declining, and 138 remaining unchanged.
The sell-off was largely driven by losses in IT, metal, and oil & gas sectors. Market experts attribute the weakness to growing uncertainty in the Middle East, particularly the rising tensions between Israel and Iran. Speculation that former U.S. President Donald Trump, who is actively involved in political discourse, may push for a military strike on Iran has further intensified concerns. This standoff, if escalated, could disrupt global oil supplies and lead to higher crude prices—an adverse development for oil-import-dependent economies like India.
Vinod Nair, Head of Research at Geojit Financial Services, commented, “The markets are falling amid rising risk of an escalation of conflicts in the Middle East and ahead of the FOMC meeting. This uncertainty pushed Brent crude prices higher—an unfavourable development for India, given its heavy reliance on oil imports, thereby dampening earnings growth.”
In addition to geopolitical tensions, traders remain cautious ahead of the outcome of the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) meeting later today. While the Fed is expected to hold interest rates steady, its guidance on future monetary policy, especially in the context of sticky inflation and recent U.S. tariff moves, could significantly influence global markets.
As a result, Indian markets are likely to remain volatile in the short term, with investors closely watching both international developments and domestic cues. Until greater clarity emerges, analysts advise maintaining a cautious investment approach.
