Futures for the GIFT Nifty were trading at 23,257 at 08:11 a.m. IST, indicating that the Nifty 50 would open above Friday’s close of 23,151.10 after posting its steepest weekly drop in years and entering a technical correction.

Supply route developments lift sentimentMarket sentiment improved after the Wall Street Journal reported that the United States was preparing to announce a coalition of countries to escort commercial vessels through the Strait of Hormuz, a maritime corridor that handles about one-fifth of global oil supply.

Additional support came after two India-flagged liquefied petroleum gas carriers Shivalik and Nanda Devi transporting roughly 92,712 metric tons of LPG successfully crossed the strait last week en route to India, easing immediate concerns about fuel supply disruptions.

India’s foreign minister Subrahmanyam Jaishankar said in an interview with the Financial Times published Sunday that he had been in discussions with Iran and that dialogue had produced some results.

However, investors remain cautious as the conflict in the Middle East continues to threaten energy flows and financial markets.

Oil and currency pressures persist as rude oil prices have stayed above $100 per barrel during the conflict, raising concerns about inflation and economic growth in India

.The surge in energy costs has also pushed the Indian Rupee to record lows against the U.S. dollar, highlighting the vulnerability of the country’s energy-dependent economy.

Traffic through the Strait of Hormuz has been heavily curtailed since the United States and Israel launched a bombing campaign on Iran at the end of February, prompting Tehran to largely halt commercial shipping through the critical waterway.

Crude prices surged as much as 28% to nearly $120 per barrel during trading, the highest level since July 2022, as the week-long war prompted some major Middle Eastern producers to curb supplies while investors assessed the risk of prolonged disruption to shipping through the Strait of Hormuz. Benchmark Brent crude was last trading about 16% higher at roughly $107 per barrel.

The sharp move in energy markets triggered a broad sell-off in sovereign bonds, reflecting expectations that higher oil prices could fuel inflation pressures at a time when policymakers remain focused on price stability.

Investors have been closely monitoring the geopolitical fallout from the conflict in the Middle East, a region responsible for a substantial share of global crude supply. The surge in oil prices has intensified concerns that supply disruptions could become prolonged if the conflict escalates further or maritime routes remain threatened.

The rapid rise in crude prices revived worries that energy-driven inflation could complicate the outlook for monetary policy in major economies.

Higher oil costs can feed into transportation, manufacturing and consumer prices, potentially forcing central banks to reassess interest-rate paths if inflation expectations begin to climb again. Market participants said the scale and speed of the oil rally had already begun reshaping expectations across financial markets.

The latest moves underscore how quickly geopolitical tensions in key energy-producing regions can reverberate across global financial systems, affecting commodity markets, bond yields and investor risk sentiment.

The search for stability has intensified as financial markets respond sharply to the conflict, with currencies and commodities moving unpredictably. The dollar has rebounded after a period of weakness over the past year, while traditional refuge currencies such as the Swiss franc and Japanese yen have weakened. Gold, meanwhile, has retained its appeal despite bouts of volatility.dollar regains defensive roleThe U.S. dollar has strengthened as investors reassess its role as a defensive asset during geopolitical shocks. Analysts say the currency’s response partly reflects the United States’ position as a net energy exporter, which can benefit when oil prices surge during conflicts.Benchmark Brent Crude climbed above $80 a barrel as tensions in the Middle East raised concerns about supply disruptions, a move that analysts say can support the U.S. economy relative to energy-importing nations.“The dollar has some safe-haven characteristics, but it is context specific,” said James Lord, head of FX strategy at Morgan Stanley.However, Lord added that the currency’s traditional haven role is not guaranteed. Policy uncertainty in the United States has weakened some of the structural factors that previously made the dollar a default refuge in times of global stress.gold’s long-term appeal persistsDespite recent price swings, gold continues to hold strong credibility as a safe-haven asset among investors.

Analysts note that the metal has surged about 240% since the start of the decade, reflecting persistent demand amid concerns over inflation, geopolitical tensions and rising global debt.Gold prices dropped sharply earlier in the week, a move market participants attributed partly to investors selling profitable positions to offset losses in other assets as market sentiment deteriorated.Still, analysts say that short-term volatility does not undermine gold’s broader appeal during periods of uncertainty. The metal’s reputation as a store of value often draws inflows during crises involving inflation risks, geopolitical tensions or financial instability.shifting behaviour of haven assetsThe current market environment highlights how traditional defensive assets can behave differently depending on the underlying cause of market turmoil.While the dollar has regained some safe-haven demand during the latest bout of geopolitical tension, currencies such as the Swiss franc and the Japanese yen often considered classic refuges have weakened.Analysts say the divergence reflects the complexity of modern global markets, where energy dynamics, policy expectations and investor positioning can alter how traditional havens perform.The renewed volatility across currencies, commodities and bonds underscores the challenge investors face in identifying reliable protection during geopolitical shocks. With markets adjusting rapidly to developments in the Middle East, investors continue to reassess which assets offer the most consistent shelter during periods of heightened uncertainty.