Mumbai: Indian equity markets witnessed a sharp sell-off on Monday, with benchmark indices closing deep in the red as escalating tensions between the US and Iran rattled investor sentiment.
The BSE Sensex plunged 1,836.57 points, or 2.46%, to settle at 72,696.39. Meanwhile, the Nifty 50 dropped 601.85 points, or 2.60%, ending the session at 22,512.65.
Market experts pointed out that the technical structure of the Nifty remains decisively bearish, marked by a pattern of lower highs and lower lows—an indication of sustained downward momentum. Immediate resistance is now seen in the 22,650–22,700 range, while the 22,900–23,000 zone is expected to act as a strong supply area.
The steep decline was largely driven by geopolitical uncertainty in the Middle East, which triggered widespread selling across sectors. Volatility spiked significantly, with the India VIX surging over 17% to close at 26.73.
Broader markets underperformed the benchmarks. The Nifty MidCap index fell 3.69%, while the Nifty SmallCap index dropped 4.16%, reflecting heavy pressure in the broader market.
Sector-wise, construction-related stocks bore the brunt of the sell-off, with the Nifty Construction index tumbling more than 5%. Realty and metal stocks also saw significant declines. On the other hand, IT stocks showed relative resilience, limiting their losses compared to other sectors.
A key trigger behind the market rout was the sharp rise in crude oil prices. Brent crude surged to $108.73 per barrel, up 2.37%, amid fears of supply disruption. Tensions escalated after US President Donald Trump warned of strong action if Iran failed to reopen the strategically vital Strait of Hormuz, prompting a counter-threat from Iran targeting energy infrastructure.
Addressing the situation, Prime Minister Narendra Modi assured in the Lok Sabha that the government is taking steps to ensure uninterrupted energy supplies through the Strait of Hormuz, a crucial artery for global oil trade.
The ongoing developments have heightened concerns around energy security and inflation, leading investors to adopt a cautious stance and triggering a broad-based equity sell-off.
With inputs from IANS