After a stellar rally in the previous week on hopes of easing tensions in the U.S.-Israel-Iran conflict, the Indian equity market has slipped back into risk-off mode amid a renewed escalation in geopolitical tensions. Sentiment has turned fragile following reports that the U.S. may move to restrict access through the Strait of Hormuz, which accounts for nearly 20% of global LNG supply, after failed negotiations with Iran, pushing crude oil prices back above $105 and reviving inflationary and macroeconomic concerns.

In opening trade, the BSE Sensex plunged as much as 1,682 points, or 2.16%, slipping below the crucial 76,000 mark to hit 75,868. Similarly, the NSE Nifty tumbled 495 points, or 2%, to the 23,555 level. Broader markets also witnessed a surge in selling activity, with the Nifty Midcap 100 and Nifty Smallcap 100 indices falling up to 1.5% at the time of reporting.

The sharp selling eroded ₹7 lakh crore of investor wealth, dragging the total market capitalisation of BSE-listed companies down to ₹442.47 lakh crore. Market breadth remained weak, with 2,728 stocks declining against 834 advances on the BSE, indicating broad-based selling.

According to market analysts, elevated crude prices, geopolitical uncertainty, and persistent FII outflows are likely to remain key overhangs for the market. They expect volatility to stay high through the week, with ongoing geopolitical developments, inflation data, and earnings announcements acting as near-term triggers.

Barring Sun Pharma, all Sensex stocks were in the red

Selling pressure was widespread across the Sensex pack, led by crude-linked stocks such as Maruti Suzuki, IndiGo, Adani Ports, and Reliance Industries. Sun Pharma was the only gainer, inching up 0.31% to ₹1,659.90.

InterGlobe Aviation, the operator of IndiGo, was the worst performer, plunging 6.37%, followed by Maruti Suzuki (-4.28%), Larsen & Toubro (-3.87%), and Asian Paints (-3.74%). Other notable laggards included Adani Ports (-3.08%) and Bajaj Finance (-3.11%). Index heavyweight Reliance Industries declined 1.94%, adding to the drag on the benchmark.

Banking and financial names were under significant pressure, with HDFC Bank (-2.48%), SBI (-2.49%), Axis Bank (-2.33%), ICICI Bank (-1.66%), and Kotak Mahindra Bank (-1.95%) all trading lower.

IT stocks also remained weak, with TCS (-1.75%), Infosys (-1.03%), Tech Mahindra (-1.18%), and HCLTech (-0.41%) in the red.

Defensive and consumption stocks were not spared either, with Hindustan Unilever (-1.35%) and ITC (-0.99%) trading lower, while Titan (-1.40%) and Trent (-2.41%) saw selling pressure in the consumption and retail space.

Sectoral indices also reflected a broad-based sell-off, with all major sectors trading in the red amid heightened risk-off sentiment. The Nifty PSU Bank index was the worst performer, falling 3.02%, followed by Nifty Oil & Gas (-2.41%), Nifty Auto (-2.20%), and Nifty Realty (-2.15%). Weakness in banking stocks was also visible in Nifty Private Bank, which declined 1.89%.

Among others, the Nifty Financial Services index dropped 2.02%, while Nifty IT slipped 1.70% and Nifty Metal declined 1.59%. Nifty FMCG fell 1.48%, Nifty Pharma declined 1.33%, and the Nifty Healthcare Index was down 1.25%. Meanwhile, Nifty Consumer Durables (-1.26%) and Nifty Media (-1.45%) also traded lower.

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