Middle East tensions push oil above $85, but equities show resilience on Trump's TACO trade

Indian equities declined on Tuesday with the Sensex and Nifty ending 0.7% lower, while the Nifty Mid-cap 150 and Small-cap 250 dropped 0.5% and 1% respectively, as Middle East tensions pushed Brent crude up 3.8% to $86.5 per barrel. Despite the escalation, the Nifty's fall has been restricted to around 1.4% over the past week, reflecting resilience driven by the TACO trade expectation that Trump will soften policy threats. Higher oil prices remain a negative for India, but investors are not panicking, with outlook over the next 12 months seen as potentially rewarding for those looking past near-term volatility.