Global stock markets appeared to be recovering from the shock of an Israeli air strike early Friday that triggered fears of an escalation in the West Asian conflict.

World stocks tumbled to a two-month low sending investors scurrying to the comfort of safe-haven bonds and gold before the scare subsided after Iran said it had no immediate plans to retaliate.

The US markets opened flat after another harrowing day for world markets. The Dow Jones Industrial Average rose 26.60 points, or 0.07 per cent, at the start of the trading day at 37801.98. The S&P 500 opened lower by 5.68 points, or 0.11 per cent, at 5005.44 and the Nasdaq composite dropped 54.540 points to 15547.10 at the opening bell.

The Indian stock markets also sank in the morning as investors were spooked by the weak revenue guidance that Infosys put out late Thursday before another frisson of fear coursed through the market after the Israeli attack.

The 30-share bellwether Sensex crashed almost 673 points to a day’s low of 71816.46 in early trade before rallying to close higher by 599.34 points or 0.83 per cent at 73,088.33. The Nifty jumped 151.15 points or 0.69 per cent to close at 22,147 after crashing 218 points to a day’s low of 21777.65.

“An increase of tensions in West Asia kept global stock markets on the brink, though they recovered after Iranian media appeared to talk down the impact of Israeli strikes,” said Deepak Jasani, head of retail research at HDFC Securities.

Strong buying was reported in banking and auto stocks barring Tata Motors. Bajaj Finance led the list of gainers as it rose by 3.38 per cent. Other gainers included Mahindra & Mahindra, HDFC Bank, JSW Steel, Maruti, Wipro, Bharti Airtel, Bajaj Finserv, ICICI Bank and ITC which gained up to 2.90 per cent.

However, Nestle India, HCL Technologies, Larsen & Toubro, Tata Consultancy Services, Tata Motors and Infosys lost up to 1.35 per cent.

“Banks were in momentum ahead of HDFC Bank results to be announced over the weekend where the lender is expected to report a healthy growth in earnings. Weak guidance from Infosys led to selling pressure across IT stocks. Markets are likely to see volatility in a broader range on the back of divergent cues. On the negative side, a flare-up in geo-political tension in West Asia, hawkish US Fed comments, and FII selling are making investors restless,” said Siddhartha Khemka, head, retail research, at Motilal Oswal Financial Services.

Though Infosys ended in the red, several brokerages remain upbeat on the prospects for the country’s second largest information technology company. Jefferies had a ‘buy’ rating on the stock even after cutting the target price from Rs 1,740 to Rs 1,630, implying a potential upside of 14 per cent from Thursday’s close. Emkay had a buy on the Infosys stock with a target price of Rs 1,750 — which is 26 times the March 2026 estimated EPS.

Analysts at BNP Paribas said that while discretionary demand remained low, the sector appears to have bottomed.