Benchmark indices ended lower on Monday as the escalation in the Iran war pushed crude oil prices higher and kept investors wary of inflation and interest-rate risks. The market also saw sharp stock-specific moves as the latest MSCI index reshuffle was implemented under the new closing-auction mechanism.
The BSE fell 307.24 points, or 0.40%, to close at 76,957.27, while the Nifty 50 declined 95.25 points, or 0.39%, to 24,080.40. The Sensex moved between 76,751.32 and 77,177.27 during the session, while the Nifty touched an intraday low of 23,993.60.
The selloff was broad-based, with Adani Ports emerging as the biggest Sensex loser, falling 4.11%. ITC declined 3.67%, Bharti Airtel lost 2.76%, while Infosys, Tata Steel and NTPC fell around 2% each. HDFC Bank, which had opened sharply higher following the announcement on CEO Sashidhar Jagdishan’s succession, gave up some gains but still ended 1.53% lower.
Sun Pharma was the top Sensex gainer, rising 1.87%, followed by ICICI Bank, which added 1.74%. Axis Bank gained 1.50%, SBI rose 1.33% and Bajaj Finserv advanced 1.02%. TCS, which had gained in early trade, ended 0.85% higher.
Vinod Nair, Head of Research, Geojit Investments Limited, said escalating tensions between the US and Iran had kept investors on edge as the prospects of a diplomatic breakthrough faded.
“Rising prices and bond yields have renewed concerns over energy-led inflation and a higher interest rate environment, which could weigh on the earnings cycle,” Nair said.
He added that comments from the Fed chair after the Jackson Hole address had increased expectations of a potential September rate hike, keeping global yields elevated and contributing to near-term volatility in emerging markets.
Despite the pressure on the benchmarks, Nair said stock-specific buying in the broader market helped the indices recover from their intraday lows. He attributed this to expectations of healthy Q1FY27 GDP growth, festive-led demand and better GST collections.
Fifteen of the 16 major Nifty sectoral indices ended lower. Nifty Media was the biggest loser, falling 2.84%, followed by Nifty Metal, which declined 2.45%.
Nifty FMCG fell 1.69%, Nifty IT declined 0.29%, Nifty Auto lost 0.04% and Nifty Financial Services ex-Bank slipped 0.06%. Nifty MidSmall IT & Telecom fell 0.88%, while Nifty Chemicals declined 0.54%.
Healthcare and pharma were among the few bright spots. Nifty Private Bank gained 0.97%, Nifty Healthcare rose 0.85% and Nifty Pharma advanced 0.72%. Nifty PSU Bank added 0.06%, while Nifty Financial Services 25/50 edged up 0.09%.
The broader market was mixed. Nifty Midcap 50 gained 0.47% and Nifty Midcap 100 rose 0.24%, while Nifty Smallcap 100 declined 0.74%.
Nifty 100 fell 0.42%, Nifty 200 declined 0.29% and Nifty 500 lost 0.33%. India VIX rose 3.37% to 11.04, pointing to increased market uncertainty.
Crude remained a key pressure point. Brent crude jumped 3.83% to $91.47 a barrel, while WTI crude rose 3.96% to $86.70, as renewed US-Iran hostilities heightened concerns over energy supplies.
The rupee also remained under pressure amid the rise in oil prices and geopolitical uncertainty.
The latest MSCI reshuffle added another layer of volatility to Monday’s session, with passive fund flows executed through the new closing-auction mechanism contributing to sharp moves in individual stocks and the broader market.
Nair said the combination of geopolitical tensions, elevated crude prices and global yields was likely to keep markets volatile in the near term, even as domestic growth expectations and stock-specific buying provide some support.
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