Sensex and Nifty tank as crude jumps and global sell-off deepens

Indian benchmark indices opened sharply lower on Monday, tracking a broad sell-off across global markets and a surge in crude oil prices following the escalation of tensions in West Asia.

The 30-share BSE Sensex tumbled 724.95 points to 73,518.39 in early trade, while the NSE Nifty dropped 222.45 points to 23,138.60, slipping below the 23,150 mark. By 9:50 a.m. IST, the Sensex was down 0.95 per cent at 73,529.06 and the Nifty had fallen 0.95 per cent to 23,142.20.

Investor sentiment was hit after Brent crude rose 3.5 per cent to about $96.5 a barrel. The global oil benchmark was last trading 3.51 per cent higher at $96.36 per barrel after Iran launched missiles at Israel following Israeli strikes on Beirut, reducing hopes of an end to the wider conflict and raising concerns over continued disruptions to oil supplies.

Selling pressure was visible across sectors, with 13 of the 16 major sectoral indices trading lower. Financial stocks declined 0.9 per cent, while information technology shares lost 1.7 per cent.

The broader market also weakened, with both the small-cap and mid-cap indices falling about 1 per cent each.

Among the 30 Sensex stocks, Mahindra & Mahindra, Tata Consultancy Services, InterGlobe Aviation, Trent, Bajaj Finance and Eternal were among the biggest losers. Power Grid, Sun Pharma, State Bank of India and Axis Bank traded in positive territory.

Global markets witnessed heavy selling. The MSCI Asia ex-Japan index dropped 2.8 per cent. South Korea’s Kospi, Japan’s Nikkei 225, Shanghai’s SSE Composite and Hong Kong’s Hang Seng index all traded significantly lower.

South Korea’s market was among the worst hit, with technology stocks leading the decline. According to market analysts, the Kospi plunged nearly 8 per cent at one stage, triggering a temporary trading halt. Japan’s Nikkei also opened sharply lower as investors moved away from risk assets.

US markets ended sharply lower on Friday. The Nasdaq Composite fell 4.18 per cent, while the S&P 500 dropped 2.64 per cent and the Dow Jones Industrial Average declined 1.35 per cent.

“The biggest concern this morning is the unwinding of the global AI-led rally. Asian equities witnessed significant selling pressure, with South Korea’s technology-heavy Kospi plunging nearly 8 per cent, triggering a temporary trading halt and extending its correction from recent record highs.

“Japan’s Nikkei also opened sharply lower, reflecting a broad risk-off mood across the region,” said Hariprasad K, Research Analyst and Founder, Livelong Wealth.

Adding to investor nervousness, renewed geopolitical tensions in the Middle East have pushed crude oil prices and the US dollar higher, he added.

“The unwinding of the AI-led rally in other Asian markets and renewed geopolitical tensions in the Middle East have intensified investor nervousness across the board,” Hariprasad said.

“Near-term sentiment is likely to remain cautious until stability returns to global markets, crude oil prices, and the technology sector.”

VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, “There are strong headwinds for the market as trading begins for the week. The sharp cut of 4.18 per cent in Nasdaq last Friday has rattled global markets with tech dominated South Korea and Taiwan facing a big sell-off.

“The escalation of conflict in West Asia, with Iran firing missiles at Israel in retaliation to Israel’s aggression in Lebanon, has hardened crude prices.”

Investors were also assessing rising expectations of a U.S. interest rate hike after a stronger-than-expected May jobs report.

Meanwhile, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,776.25 crore on Friday, according to exchange data.

The market decline comes after India on Friday unveiled measures aimed at supporting the rupee as the economy grapples with costly oil imports and foreign investor outflows in the wake of the Iran war.

US President Donald Trump has asked Israel Prime Minister Benjamin Netanyahu not to retaliate to Iran’s latest barrage of missiles, saying it would jeopardise the ongoing negotiations for a peace deal to end the over three-month-long conflict.

According to Axios, Trump spoke to Netanyahu after Iran launched missiles at Israel on Sunday in an effort to prevent fresh tensions from derailing the peace negotiations. Trump also urged Iran to return to the negotiating table.

Among individual stocks, InterGlobe Aviation fell 2.8 per cent after Bloomberg News reported that the airline is unlikely to receive the full batch of nine Airbus A321XLR aircraft scheduled for delivery this year due to supply chain disruptions linked to the Iran war.

Defying the broader market trend, EMS surged 14.1 per cent after securing an order worth 1.03 billion rupees ($10.8 million).

On Friday, the Sensex had declined 116.67 points, or 0.16 per cent, to settle at 74,243.34, while the Nifty fell 49.85 points, or 0.21 per cent, to close at 23,366.70.