Benchmark indices Sensex and Nifty 50 fell over 1 per cent in early trade on Monday and remained volatile, tracking a sharp sell-off across Asian markets after a spike in crude oil prices, escalating tensions in West Asia and rising fears of a prolonged high-interest-rate environment in the US dented investor sentiment. The BSE Sensex opened 828 points lower, while the Nifty 50 declined 286 points in opening trade.
Brent crude futures surged 3.5 per cent to $96.5 a barrel after Iran launched missiles at Israel following Israeli strikes on Beirut. This triggered concerns over disruption to oil supplies and reduced hopes of an end to the conflict in the region.
Asian markets also came under pressure after Wall Street witnessed a sharp sell-off on Friday, led by technology stocks.
Wipro, TCS lead Nifty 50 fall
Broader markets were also weak, with small-cap and mid-cap indices falling around 1 per cent in early trade. Sectorally, all indices except pharma and healthcare traded in the red. Realty, IT and metal stocks led the decline, while high-weightage financial and IT counters slipped 1.3 per cent and 1.5 per cent, respectively.
Among the Nifty 50 stocks, Sun Pharma rose 0.95 per cent, Dr Reddy’s Laboratories gained 0.77 per cent and Apollo Hospitals advanced 0.49 per cent. On the losing side, Wipro plunged 4.99 per cent, TCS declined 2.40 per cent, Mahindra & Mahindra fell 2.35 per cent, Hindalco dropped 1.99 per cent and Bajaj Finance lost 1.98 per cent.
V K Vijayakumar, chief investment strategist at Geojit Investments Ltd, said the sharp 4.18 per cent correction in Nasdaq on Friday had rattled global markets, particularly tech-heavy Asian indices such as South Korea and Taiwan. He added that the escalation in West Asia had hardened crude oil prices, while strong US jobs data reduced expectations of a near-term rate cut by the Federal Reserve.
He added that the sell-off in the US was largely tech-led and could trigger a rotation from AI-linked trades to non-AI segments, which may benefit India. According to him, India’s FY26 GDP growth estimate of 7.7 per cent and better-than-expected Q4 earnings could provide fundamental support to the market.
Last week, Sensex declined 532.4 points, and the Nifty dipped 181.05 points. On Friday, Indian benchmark indices ended marginally lower after a volatile session as investors reacted to the RBI monetary policy outcome and continued FII selling. The RBI kept the repo rate unchanged at 5.25 per cent, retained its neutral stance, raised its inflation forecast and lowered GDP growth projections, keeping sentiment cautious.
Globally, US markets closed sharply lower on Friday, with the Dow Jones falling 1.4 per cent, the S&P 500 declining 2.6 per cent and the Nasdaq tumbling 4.2 per cent amid a sell-off in AI and chipmaker stocks. In Asia, South Korea’s Kospi crashed around 9 per cent, led by heavy selling in Samsung and SK Hynix, while Japanese markets also traded lower.