Sensex drops 700 pts, Nifty tests 24K as West Asia tensions and rising crude oil weigh on sentiment; IndiGo, Tata Steel lead losers

Indian benchmark indices started the week on a negative note, with the BSE Sensex falling over 700 points and the NSE Nifty50 testing 24,000 mark, dragged down by losses in financial, auto, and metal stocks. Weak cues from Asian markets and a sharp rise in crude oil prices following renewed escalation in West Asia weighed on investor sentiment, as heightened tensions between the U.S. and Iran reignited global inflation concerns.

At around 9:45 a.m., the BSE Sensex was down 426.72 points, or 0.55%, at 77,142.67, while the NSE Nifty50 declined 132.85 points, or 0.55%, to 24,074.70. In early trade, the 30-share Sensex fell as much as 712 points to hit an intraday low of 76,857.43, while the Nifty50 touched an intraday low of 24,000.20, down 207 points.

Broader markets showed relative resilience despite the sell-off in benchmark indices, with the Nifty Midcap 100 declining 0.36% and the Nifty Smallcap 100 falling 0.33%. Meanwhile, India VIX, the market's fear gauge, jumped 7.67% to 13.19, reflecting heightened investor nervousness and expectations of increased market volatility.

IndiGo, Tata Steel, Maruti, HDFC Bank, Asian Paints among top losers

Among sectoral indices, IT and Media bucked the broader weakness, gaining 0.51% and 0.52%, respectively. On the other hand, Nifty Metal, Auto, Financial Services, and Realty were among the worst performers, declining by up to 0.9%.

On the Sensex pack, TCS emerged as the top gainer, rising 2.17%, followed by HCL Technologies (0.94%), NTPC (0.73%), Power Grid (0.48%), Tech Mahindra (0.31%), and Axis Bank (0.30%).

IndiGo led the losers' chart, declining 1.95%, followed by Tata Steel (-1.88%), Maruti Suzuki (-1.61%), HDFC Bank (-1.33%), Asian Paints (-1.21%), BEL (-1.18%), Bajaj Finserv (-1.07%), UltraTech Cement (-1.05%), and Eternal (-1.02%).

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said Indian corporates have largely absorbed the worst of the global headwinds, and the outlook now depends primarily on rural demand and crude oil prices.

"If monsoon-related sowing delays don't materially dent rural income and consumption trends, and crude prices remain range-bound rather than spiking again, earnings should see a gradual pickup through the rest of FY27," he said.

He added that crude oil remains the key variable for Indian equities. "Brent is currently trading around $79. As long as Brent trades below $90, the market is unlikely to be impacted significantly. However, if Brent rises above $90, it could trigger a significant market correction."

Ajit Mishra, SVP, Research at Religare Broking, said investors will closely track domestic macroeconomic data this week, including June CPI inflation, WPI inflation, unemployment figures, the trade balance, and foreign exchange reserves. He added that the Q1 FY27 earnings season is expected to gather pace, with management commentary likely to shape sectoral trends and earnings expectations.

According to Mishra, developments in West Asia and their impact on crude oil prices will remain key global triggers, while strong domestic fundamentals continue to support the market despite near-term volatility.

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