Indian stock markets started the week with a sharp sell-off, with the benchmark indices falling nearly 3% intraday as crude oil prices surged past $115 per barrel amid escalating geopolitical tensions in the Middle East.

The spike in Brent prices triggered fears of renewed inflationary pressures and a widening import bill for India, prompting investors to rush for the exit and triggering broad-based selling across sectors.

Paring some of the early losses, the benchmark BSE Sensex closed at 77,566.16, down 1,352.74 points or 1.71%. Similarly, the Nifty 50 settled at 24,028.05, down 422.40 points or 1.73%.

Broader markets also saw sharp selling pressure, with the Nifty Midcap and Nifty Smallcap indices settling 1.97% and 2.22% lower, respectively.

The sell-off wiped out over ₹8 lakh crore in investor wealth in early trade, with the total market capitalisation of companies listed on the BSE falling to around ₹441.20 lakh crore.

Crude spike triggers market volatility

The sharp decline in equities followed a steep rally in global oil prices amid intensifying tensions between the United States and Iran.

Brent crude surged above $115 per barrel, briefly touching its highest level since 2022, raising concerns about inflation and higher import costs for oil-dependent economies such as India.

Ponmudi R, CEO of Enrich Money, said markets opened with a sharp gap-down of nearly 3% as global cues deteriorated following the escalation in the Middle East conflict.

“The escalation in geopolitical risks pushed crude oil prices above the $100 per barrel mark and drove the Indian rupee to a record low against the US dollar, amplifying concerns around inflation and external balances,” he said.

However, selling pressure eased in the latter half of the session, allowing indices to trim part of their losses as buying emerged at lower levels.

Market breadth remained firmly negative during the session. Out of 4,536 stocks traded, 981 advanced while 3,368 declined and 187 remained unchanged.

A total of 72 stocks hit their 52-week highs, whereas 875 stocks slipped to their 52-week lows.

Additionally, 171 stocks were locked in the upper circuit, while 306 stocks hit their lower circuit limits, highlighting widespread selling across the broader market.

Auto, banks and metals among top laggards

On the BSE Sensex pack, 25 out of the 30 stocks ended in the red.

UltraTech Cement led the losses, dropping over 5%, while Maruti Suzuki India and Mahindra & Mahindra declined around 4–5%.

Banking stocks also remained under pressure, with State Bank of India falling nearly 4%, while ICICI Bank and Axis Bank declined more than 2% each.

Sectorally, most indices ended in negative territory. The Nifty Auto index emerged as the worst performer, plunging 4.10%, while the Nifty PSU Bank index dropped 3.97%.

The Nifty Private Bank index fell 2.78%, while the Nifty Metal and Nifty Oil & Gas indices declined 2.60% and 2.37%, respectively.

Consumer-focused sectors also ended lower, with the Nifty Consumer Durables index dropping 2.81% and the Nifty FMCG index falling 1.56%.

Despite the broader weakness, technology stocks offered some support to the market. Shares of Reliance Industries rose about 1.4%, while Infosys and HCLTech ended marginally higher. The Nifty IT index managed to close slightly positive, rising 0.08%.

Volatility surges as geopolitical risks rise

According to Ponmudi R, geopolitical developments have significantly increased market volatility.

Iran’s more hardline stance under its newly elected leader Mojtaba Khamenei, along with renewed threats from the United States, has intensified investor anxiety.

The India VIX surged nearly 24%, indicating heightened uncertainty and declining investor confidence in near-term market stability.

Energy markets also remained volatile, with crude gaining nearly 12% and natural gas prices rising about 5% amid fears of supply disruptions through the Strait of Hormuz.

Technical indicators signal continued pressure

Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, said the sharp spike in oil prices weighed heavily on market sentiment and triggered a gap-down opening.

“After the weak opening, the Nifty slipped to an intraday low of 23,697 but later staged a strong rebound of more than 330 points, indicating buying interest at lower levels,” he said.

However, Shah noted that the broader trend remains weak, with the index trading more than 4% below its 200-day exponential moving average, suggesting continued downside pressure in the near term.