MUMBAI: Investors on the edge after an escalation in the West Asia conflict with most Dalal Street players expecting the Sensex to open lower on Monday. They also expect crude oil prices to spike, which in turn would put pressure on the rupee.On Sunday, after the US bombed three nuclear sites in Iran and the latter resolved to close the Strait of Hormuz through which about 20% of the world’s crude oil and natural gas pass, market players said oil prices could spike soon.On Friday, as Dalal Street investors ignored the geopolitical tensions between Iran and Israel, the sensex recorded a four-digit points gain to close at 82,408 points. And Nifty on the NSE gained 319 points to close at 25,112 points.

Globally, Brent was trading at above the $77/barrel level while WTI crude was around the $75 level. Both were trading at near their four-month high levels.Despite the global headwinds, India’s economic fundamentals on the other hand could act as a balancing act to those negative factors, Kotak Mahindra Mutual Fund MD Nilesh Shah said.“Indian equity and rates market is like a man having average temperature with one leg in cold water and the other in hot water. Domestic factors support current valuation for long term investors expecting moderate returns. (However) global factors from (the US president Donald) Trump’s policies to oil price/supply are boiling hot,” he said.Shah said that investors need to keep a watch on the availability of oil as well as the price. “We have enough forex reserves to manage higher oil prices in double digits. (However) oil prices crossing triple digit or restricted supply will have an adverse impact on the market.” Shah added that investors should use any market correction as an opportunity to accumulate while traders should remain on a cautious mode.The geopolitical uncertainty could also push up prices of gold as investors move to ‘risk off’ mode, meaning they sell risky assets like equities and move to haven assets like gold and govt bonds, market players said. A section of the market players believes that in case Iran doesn’t react aggressively to the US’s move to bomb its three nuclear sites, the markets may soon recover after a negative opening in Monday’s early trade. One trader even pointed out that TA 35, the main stock market benchmark in Israel, was up more than 1% in Sunday’s trading session, indicating investors in Israel had ignored the geopolitical tensions.