Mumbai: Indian stock markets ended sharply lower on Monday, with benchmark indices falling to nearly two-month lows as escalating tensions in the Middle East pushed crude oil prices higher and dampened investor sentiment.

The BSE Sensex dropped 719.08 points, or 0.97 per cent, to close at 73,524.26, while the NSE Nifty50 declined 242.10 points, or 1.04 per cent, to settle at 23,123. Both indices recorded their lowest closing levels in almost two months.

The broad-based sell-off was triggered by rising geopolitical tensions, surging oil prices, weakness in global technology stocks and concerns over inflation and interest rates.

Crude oil surge weighs on sentiment

The primary factor driving the market decline was a sharp increase in crude oil prices following fresh military strikes involving Israel, Iran and Lebanon. The escalation raised fears of a prolonged conflict that could disrupt global oil supplies.

Brent crude rose 3.81 per cent to $96.64 per barrel, while West Texas Intermediate (WTI) crude climbed 4.32 per cent to $94.45. Analysts warned that prices could approach the $100 per barrel mark if tensions persist.

For India, which imports a significant portion of its crude oil requirements, higher oil prices pose multiple risks. These include rising inflation, increased fiscal pressure and potential depreciation of the rupee.

Elevated crude prices can also impact corporate profitability by increasing input and transportation costs across sectors.

Global cues and tech sell-off add pressure

Apart from geopolitical concerns, weakness in global technology stocks further weighed on market sentiment. Investors have begun to question the sustainability of the strong rally driven by artificial intelligence (AI) over the past year.

The sell-off in global tech and semiconductor stocks spilled over into Indian markets. The Nifty IT index fell 1.23 per cent, reflecting continued pressure on technology companies.

Among major IT stocks, TCS declined 2.13 per cent, Infosys fell 0.81 per cent, HCL Technologies slipped 0.34 per cent and Tech Mahindra dropped 1.35 per cent.

Market participants are increasingly cautious about high valuations in the technology sector, especially amid rising global interest rates and uncertain demand outlook.

Broad-based selling across sectors

The market weakness was widespread, with most sectoral indices closing in the red.

Nifty Realty emerged as the biggest loser, falling 2.56 per cent. Nifty Metal declined 2.33 per cent, Nifty Auto dropped 1.85 per cent, Nifty Media slipped 1.71 per cent and Nifty Oil & Gas fell 1.57 per cent.

Broader markets also came under pressure. The Nifty Midcap 100 index fell 1.40 per cent, while the Nifty Smallcap 100 index declined 1.92 per cent, indicating selling across the board.

The India VIX, often referred to as the market’s fear gauge, surged 7.85 per cent, signalling heightened volatility and nervousness among investors.

Key stocks drag indices lower

Among Sensex constituents, several heavyweight stocks witnessed declines. Eternal fell 3.24 per cent, emerging as the top loser. Mahindra & Mahindra declined 2.51 per cent, Trent dropped 2.21 per cent and InterGlobe Aviation (IndiGo) slipped 2.16 per cent.

Reliance Industries and TCS both fell 2.13 per cent, while Bajaj Finance, Larsen & Toubro, Tata Steel and Bajaj Finserv also registered losses of around 2 per cent each.

On the other hand, a few stocks managed to post gains. Power Grid Corporation rose 1.79 per cent, Tech Mahindra gained 1.35 per cent, Bharat Electronics added 1.20 per cent, Bharti Airtel advanced 1.13 per cent and State Bank of India edged up 0.42 per cent.

Outlook remains uncertain

According to market experts, global factors continue to dominate investor sentiment. Strong economic data from the United States, coupled with persistent inflation, has increased the likelihood of further monetary tightening by central banks.

Higher bond yields and a stronger US dollar are also contributing to capital outflows from emerging markets, including India.

Despite the recent correction, analysts believe Indian markets have shown relative resilience compared to global peers. However, sustained high crude oil prices and geopolitical uncertainty could limit near-term gains.

Conclusion

The sharp fall in Indian equity markets highlights the vulnerability of global and domestic markets to geopolitical developments and commodity price shocks. As tensions in the Middle East continue to evolve, investors are likely to remain cautious.

Going forward, market direction will depend on crude oil price trends, geopolitical stability and signals from global central banks on interest rates. Any further escalation in the conflict could increase volatility and put additional pressure on emerging markets like India.


(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the News Karnataka Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)