The Nifty 50 and the S&P BSE Sensex tumbled almost 3% at the open on Monday as investors rushed to cut risk and reassess the global fallout as the war in West Asia intensified. The Nifty 50 logged its biggest single-day fall since 7 April 2025.
The war stoked fresh concerns about tighter oil supplies and the risk of prolonged disruptions to shipments passing through the Strait of Hormuz, one of the world’s most critical energy transit routes.
The Asian markets witnessed a selling rout. Japan’s Nikkei 225 slumped 7%, Hong Kong’s Hang Seng dropped 2.7%, the Taiwan Weighted tanked 5%, and South Korea’s Kospi was over 8% down.
At 12 pm, the Indian had come off their lows. The Nifty 50 was at 23,878.15, down 2.3%, while the Sensex was down 2.3% at 77,111.92. The Nifty 50 hit an intraday low of 23,697.80, its lowest level since April 16, when it slipped to 23,437.2.
The index formed a strong bearish candle with a lower high-lower low pattern, indicating sustained selling pressure as Brent Crude surged, Rajesh Palviya, SVP research (head technical & derivatives) at Axis Securities, said in a report.
“A sustained break below 24,000 could trigger a deeper correction. On the upside, a decisive move above the bearish gap zone of 25,000-25,141, formed on 2 March 2025, is essential for bulls to regain control,” he said.
Among sectoral indices, the Nifty PSU Bank and the Nifty Auto fell the most, each declining by about 5% on Monday. The broader market fell in tandem with the benchmark indices, with the Nifty Midcap 100 and the Nifty Smallcap 250 falling almost 3% each.
The spike in uncertainty was reflected in the India VIX, the volatility index that’s often referred to as the market’s fear gauge, which surged about 22%, signalling a sharp jump in investor anxiety. Such moves typically indicate heightened nervousness in the market, with traders bracing for more volatility as geopolitical developments unfold.
FIIs turn sellers
Foreign institutional investors, who were net buyers of worth ₹17,147.25 crore in February, quickly flipped to the sell side in March, offloading shares worth ₹6,418.90 crore so far this month.
Domestic institutional investors stepped in as steady buyers. After buying equities worth ₹38,423.11 crore in February, they continued to cushion the market in March as well, buying shares worth ₹32,786.92 crore so far.
surged, with Brent Crude jumping to $114.74 per barrel—its highest level since 29 July 2022. Crude oil above the $100 a barrel mark would indicate that the severe oil supply disruption could continue for a longer period, ICICI Securities said in a report dated 6 March.
“In such an environment, NIFTY 50 could potentially drop by ~10% from the pre-conflict-day level of 25,178; and NIFTY 50’s P/E ratio could drop to ~18x which is closer to the lowest levels in the post covid era,” ICICI Securities said.
Consequently, the brokerage said the earnings yield could rise to about 5.6%—the highest in the post-Covid period—while the gap between bond yields and earnings yield could narrow to about 100 basis points. This would make equities relatively more attractive than bonds, assuming bond yields do not spike.