The Indian stock market is anticipated to adopt a cautious stance on Monday following the escalation of tensions between Israel and Iran. Investors will closely monitor the unfolding geopolitical situation in Western Asia, with the market bracing for the potential effect of the ongoing tensions in the region. Analysts anticipate that the Indian stock market may experience heightened volatility as investors navigate through the evolving geopolitical landscape.

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"The escalating geopolitical tensions in the Middle East, alongside supply concerns, have propelled crude prices upward, impacting overall market sentiment" said Vinod Nair, Head of Research at Geojit Financial Services.

He further added "Indian markets may consolidate amidst worries over delayed US rate cuts, escalating Middle East tensions driving oil prices up, and subdued Q4 earnings projections".

The escalation of tensions between Israel and Iran has raised geopolitical risks, with market participants assessing the potential implications for regional stability and global economic dynamics. As a result, the Indian stock market may experience fluctuations in response to geopolitical developments.

"It is something not positive for equity markets worldwide. As long it is between Iran and Israel it is still manageable but if other countries join them, then the escalation will be more serious. However, our markets are resilient and can arrest at psychological support level which is at 22000 on Nifty," said Shrikant Chauhan, Executive Vice President, Kotak Securities.

"This extensive onslaught marks another flashpoint in the Israeli- Hamas conflagration, a significant worsening of the geopolitical situation in general and the Middle East in particular. While World War III is not on the anvil- at least not yet, there is a clear possibility, nay likelihood, of horizontal escalation and retaliatory and even deterrent strikes by Israel" said Dr. Manoranjan Sharma, Chief Economist- Infomerics Ratings.

Analysts suggest that market participants remain vigilant and exercise caution amidst heightened geopolitical tensions. The impact of geopolitical events on market sentiment and investor confidence underscores the importance of closely monitoring developments in Western Asia.

While the Foreign portfolio investors (FPIs) continue to remain net buyers for the third month in April in Indian stock markets. According to the data by National Securities Depository Limited (NSDL) so far in the month, FPI's bought stocks worth Rs 13,347 crore in India.