Sensex, Nifty Slip Over 1% as Rising US-Iran Tensions Push Oil Prices Higher

Mumbai: Indian stock markets opened on a weak note on Monday, with both benchmark indices falling more than 1 per cent in early trade after fresh tensions between the United States and Iran dampened hopes of a peace breakthrough in West Asia and pushed global crude oil prices sharply higher.

The BSE Sensex dropped as much as 943 points, or 1.22 per cent, to touch an intraday low of 76,384. Meanwhile, the Nifty 50 declined 280 points, or 1.15 per cent, to 23,897 during morning trade.

All major sectoral indices traded in negative territory. Heavy selling was seen in Nifty Consumer Durables, Auto, PSU Bank, Private Bank, Oil & Gas and Chemicals indices, which fell up to nearly 3 per cent.

Among the major losers on the Nifty were Titan Company, InterGlobe Aviation, Mahindra & Mahindra, Shriram Finance, Maruti Suzuki, Bajaj Auto, Bharti Airtel and Dr. Reddy's Laboratories.

The India VIX, often referred to as the market’s fear gauge, also rose nearly 2 per cent to 10.7, indicating heightened volatility.

Market experts said investor sentiment weakened after Donald Trump rejected Iran’s response to a proposed peace agreement related to the ongoing West Asia conflict. This reduced hopes of an early resolution to the crisis and raised concerns over disruptions in global oil supply routes, particularly through the Strait of Hormuz.

Following the developments, Brent crude prices surged over 4 per cent to 105.76 dollars per barrel, while US West Texas Intermediate crude climbed more than 5 per cent to 100.31 dollars per barrel.

Analysts also pointed to Prime Minister Narendra Modi’s recent appeal to reduce the consumption of fuel, gold, chemical fertilisers and edible oil, along with avoiding unnecessary foreign travel, as a sign of growing concern over India’s current account deficit amid rising crude oil prices.

According to experts, sectors linked to petroleum, fertilisers, aviation, hotels and luxury consumption may remain under pressure in the near term, while defensive sectors such as pharmaceuticals could show resilience.

Elsewhere in Asia, markets showed a mixed trend. Japan’s Nikkei 225 and Hong Kong’s Hang Seng Index slipped around 0.3 per cent each, while South Korea’s KOSPI gained more than 4 per cent.

With inputs from IANS