Stock markets ended sharply lower on Monday as rising tensions in the Middle East sent crude oil prices soaring and triggered a broad selloff across global equities.
The benchmark to close at 73,524.26, while the Nifty50 declined 242.10 points, or 1.04%, to settle at 23,123. Both indices ended at their lowest levels in nearly two months.
Vinod Nair, Head of Research at Geojit Investments Limited, said domestic markets have shown resilience compared with global peers despite the ongoing correction.
“Global sentiment has weakened amid a flare-up of tensions in the Middle East, pushing crude towards $100 per barrel. Simultaneously, global technology stocks have witnessed a sell-off, as investors begin to question the sustainability of the AI-led rally,” he said.
The weakness was not limited to India. Markets across Asia came under pressure after fresh Israeli strikes on and Lebanon raised concerns that the conflict could widen further, threatening global oil supplies and adding to inflation worries.
For Indian investors, the biggest concern remains .
Brent crude surged 3.81% to $96.64 per barrel, while WTI crude climbed 4.32% to $94.45. With India importing the majority of its crude oil requirements, any sustained rise in oil prices can increase inflation, pressure the rupee and weigh on economic growth.
The latest escalation in the Middle East conflict overshadowed almost every other market trigger.
Fresh military action involving , Iran and Lebanon pushed oil prices sharply higher and reduced hopes of an early diplomatic resolution.
Higher crude oil prices are particularly important for India because they affect everything from fuel costs and transportation expenses to inflation and corporate profitability.
Investors fear that if crude continues moving towards the $100-per-barrel mark, it could complicate the Reserve Bank of India’s efforts to keep inflation under control and support growth at the same time.
Another factor weighing on sentiment was weakness in global technology stocks.
Investors have started questioning whether the massive rally driven by artificial intelligence over the past year can continue at the same pace.
The selloff was visible across global semiconductor and technology-heavy markets and spilled over into Indian equities.
The Nifty IT index fell 1.23%, extending the pressure on technology shares after concerns emerged over valuations and the sustainability of the AI-led rally.
TCS fell 2.13%, Infosys declined 0.81%, HCL Technologies lost 0.34% and Tech Mahindra slipped 1.35%.
The weakness was broad-based across sectors.
Nifty Realty emerged as the biggest loser, falling 2.56%.
Nifty Metal dropped 2.33%, Nifty Auto declined 1.85%, Nifty Media slipped 1.71% and Nifty Oil & Gas fell 1.57%.
Even broader markets were under pressure. The Nifty Midcap 100 fell 1.40%, while the Nifty Smallcap 100 declined 1.92%.
India VIX, often referred to as the market’s fear gauge, jumped 7.85%, indicating rising nervousness among traders.
Among stocks, Eternal emerged as the biggest loser, falling 3.24%.
Mahindra & Mahindra declined 2.51%, Trent dropped 2.21%, IndiGo fell 2.16%, Reliance Industries lost 2.13% and TCS slipped 2.13%.
Bajaj Finance fell 2.05%, Larsen & Toubro lost 2.00%, Tata Steel declined 1.91% and Bajaj Finserv dropped 1.89%.
On the positive side, Power Grid Corporation gained 1.79%, Tech Mahindra rose 1.35%, Bharat Electronics climbed 1.20%, Bharti Airtel added 1.13% and State Bank of India gained 0.42%.
Nair noted that stronger US economic data and persistent inflation have increased the risk of further monetary tightening, resulting in higher bond yields and a stronger US dollar.
According to him, India could continue to outperform several global markets if the correction in global technology stocks deepens. However, elevated crude oil prices and uncertainty around interest rates could limit market gains in the near term.
The immediate focus for investors will remain on developments in the Middle East and movements in crude oil prices.
Any further escalation between Israel and Iran could push oil prices closer to $100 per barrel, increasing pressure on emerging markets such as India.
At the same time, investors will also track US inflation data and comments from Federal Reserve officials for clues on future interest rates, which continue to influence global risk appetite.
(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 India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)