Markets suffered one of their worst single-day selloffs of 2026 on Monday as an upsurge in global crude oil prices, triggered by escalating US-Iran conflict, sent benchmark indices tumbling, and volatility to its highest in nearly nine months. Risk-off trade by marketmen kept global stocks under pressure.
The BSE Sensex crashed 1.71 per cent, to close at 77,566.16, while the Nifty 50 fell 1.73 per cent, to settle at 24,028.05. Elsewhere in Asia Korea’s Kospi was the worst affected by plunging over 8 per cent intraday but closed with a loss of nearly 6 per cent. Nikkei lost 5.2 per cent. Others in the region fell between 0.75 per cent and 3 per cent.
Volatility index rose 17.51 per cent to 23.36, capturing the nervous mood of investors.
Brent crude surged to approximately $119 per barrel — the highest since July 2022 — as the US-Israel conflict with Iran entered its 10th day with no signs of de-escalation. WTI crude jumped nearly 30 per cent in a single session. Shipping through the Strait of Hormuz was suspended, Saudi Arabia shut its largest refinery, Qatar halted LNG operations, and the UAE and Kuwait joined Iraq in output cuts — collectively threatening to remove over 4 million barrels per day from global supply.
However, crude prices retreated from their intraday highs after reports emerged that G7 nations are considering a coordinated release of emergency oil reserves to stabilise markets, with at least three members including the US expressing support. Brent crude fell about $13 from its peak of $119 per barrel on the back of these developments.
Thanks to cooling off crude oil prices, Sensex and Nifty recovered. The Nifty, which slid to an intraday low of 23,697.80, recovered over 330 points late in the session to claw back above 24,000.
The disruptions in the Middle East could remove over 4 million barrels per day of crude oil from global supply along with a significant amount of LNG, driving prices higher, said Kaynat Chainwala, AVP Commodity Research, Kotak Securities.
Analysts see $90 per barrel as a critical support level for the crude on the downside, while in the coming months $87 and then $95 per barrel are seen as resistance levels on the upside.
FPIs pulled out ₹6,345 worth shares on Monday, according to BSE provisional data even as domestic institutions pumped in another ₹9,013.80 crore.
Nifty PSU Bank and Nifty Auto led losses, falling 2–4 per cent, along with Capital Goods, Metal, Oil & Gas, and Private Bank indices. Only Nifty IT held ground. Nifty Midcap 100 and Smallcap 100 each fell nearly 2 per cent.
On the Nifty 50, major losers were Tata Motors (-5.27 per cent), UltraTech Cement (-5.25 per cent ), and Maruti Suzuki (-4.67 per cent. Oil marketing companies — IOC, BPCL, and HPCL — also came under pressure as higher crude prices threatened to squeeze margins.
Gainers included Wipro, up 1.64 per cent and RIL, which was up nearly 1 per cent.
Gold fell 1.07 per cent to $5,097.91 per ounce (approximately ₹1,51,203 per 10 grams), while silver declined 0.54 per cent to $83.44 per ounce (around ₹2,47,494 per kg).
The Rupee felt the impact of rising crude oil prices amid the ongoing West Asia conflict and closed at a record low of 92.33 per US Dollar, down 59 paise against previous close of 91.74. The central bank is understood to have intervened in the market, selling dollars through state-owned banks to smoothen the volatility in the domestic currency. Intraday, the Rupee tested a high/low of 92.15/92.35 per USD.
Chainwala noted that dollar strength and margin-call-driven liquidations weighed on precious metals despite the geopolitical turmoil, adding: “…If geopolitical tensions begin to ease, the current dollar strength may fade… creating room for gold and silver to stage a rebound…”
Hariprasad K, Founder of Livelong Wealth, said: “Market sentiment is likely to remain fragile in the near term as investors closely monitor developments in the West Asia and their potential implications for global energy markets and inflation…”