Domestic equity benchmarks, the BSE Sensex and Nifty 50, opened on a mildly positive note on Monday but slipped into the red as geopolitical tensions weighed on investor sentiment.
Initial gains faded quickly after Donald Trump warned of severe consequences if Iran failed to reopen the Strait of Hormuz by a set deadline.
The Sensex fell around 150 points, while the Nifty declined over 40 points in early trade.
Selling pressure emerged in several heavyweight stocks, including IndiGo, Kotak Mahindra Bank, Tata Steel, Sun Pharma, Bajaj Finance, M&M and Dr Reddy’s, each declining up to 2 per cent.
Earlier, both indices had opened higher, supported by gains in banking and auto stocks.
Sectoral indices largely traded in positive territory at the start, led by PSU and private banking stocks, along with auto, financial services and IT. Metal, pharma and realty stocks, however, saw mild declines, reflecting selective weakness.
Broader markets showed resilience, with midcap and smallcap indices registering modest gains. Despite this, volatility remained elevated, with the India VIX rising over 2 per cent, signalling caution among investors.
Analysts noted that markets remain sensitive to developments in the Iran–Israel–US conflict, with rising crude oil prices and lack of progress in ceasefire efforts weighing on sentiment. They added that the Reserve Bank of India’s monetary policy decision later this week will be a key trigger.
Investor activity also reflected caution. Foreign institutional investors continued to offload equities, while domestic institutional investors provided some support.
Global cues remained mixed, with Asian markets showing varied trends and Wall Street ending the previous session with modest gains.
Meanwhile, crude oil prices surged sharply, adding to inflation concerns and further pressuring market sentiment.
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