Domestic stock markets witnessed a sharp sell-off on Monday, with benchmark indices falling close to 2 per cent as investors reacted to worsening global sentiment linked to stalled talks between the United States and Iran.
The BSE Sensex dropped over 1,600 points during early trade, slipping to around 75,875, while the Nifty 50 declined by nearly 500 points to hover near 23,555.
The fall was driven by broad-based selling, particularly in banking, financial services, automobile, real estate and energy stocks.
Among major laggards were Eicher Motors, Maruti Suzuki, Shriram Finance, Bajaj Finance and HDFC Bank. All sectoral indices remained in negative territory throughout the session.
Broader markets also mirrored the weakness, with small-cap stocks taking a bigger hit. The Nifty Smallcap 100 and Nifty Smallcap 250 both declined around 2 per cent. Meanwhile, market volatility surged, with the India VIX rising more than 13 per cent.
Market experts attributed the downturn to heightened geopolitical concerns, particularly around the Strait of Hormuz, a crucial passage for global crude shipments. Renewed tensions have pushed oil prices higher, adding to inflationary worries.
Brent crude climbed to about $103 per barrel, while US WTI crude moved above $105, marking a sharp rebound in energy prices.
Analysts warned that for India, which depends heavily on oil imports, sustained increases could widen the current account deficit. They could weaken the rupee and push up inflation.
Weakness was also visible across global markets. Asian indices, including Japan’s Nikkei, Hong Kong’s Hang Seng and South Korea’s KOSPI, traded lower. In the US, the S&P 500 ended marginally down, while the Nasdaq Composite closed slightly higher in the previous session.
Analysts expect market swings to persist in the near term. Geopolitical developments, inflation data and corporate earnings are likely to influence investor sentiment.
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