Indian stock markets witnessed a sharp decline in early trade on Monday, with benchmark indices falling over 1 percent, as surging crude oil prices triggered by escalating geopolitical tensions in West Asia dampened investor sentiment. The BSE Sensex plunged more than 800 points to trade below the 82,000 level, while the NSE Nifty 50 slipped below the 25,000 mark.
Market Performance
The 30-share BSE Sensex was trading 825.62 points lower at 81,905.82 at 9:40 am, while the broader Nifty 50 dropped 247.95 points to 25,021.65. All sectoral indices were in the red, with auto, banking, and metal stocks leading the losses.
Key Losers
- Mahindra & Mahindra fell over 3 percent
- Tata Motors declined 2.5 percent
- Bajaj Finance dropped 2.3 percent
- ICICI Bank slipped 2 percent
- State Bank of India lost 1.8 percent
Oil Prices Surge
Brent crude oil prices jumped over 3 percent to trade above $80 per barrel, the highest level in several weeks, after Iran launched a missile attack on Israel over the weekend. The escalation in the conflict has raised fears of supply disruptions from the oil-rich region, pushing up energy costs.
Analysts said the spike in oil prices could stoke inflationary pressures, potentially forcing central banks to keep interest rates higher for longer, which could weigh on economic growth. "Rising oil prices are a major headwind for India, which imports over 80 percent of its crude oil requirements. This could widen the current account deficit and put pressure on the rupee," said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Global Markets Weak
Asian markets also traded lower, with Japan's Nikkei 225 falling 2 percent and Hong Kong's Hang Seng declining 1.5 percent. US stock futures pointed to a weak opening later in the day as investors shifted to safe-haven assets like gold and the US dollar.
Gold prices rose 1 percent to $2,680 per ounce, while the dollar index strengthened against major currencies. The Indian rupee weakened to 84.02 against the US dollar in early trade.
Outlook
Market experts expect volatility to persist in the near term as geopolitical developments unfold. "Investors should remain cautious and avoid aggressive bets. The situation in West Asia is fluid, and any further escalation could trigger a deeper correction," said Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services.
The markets will also keep an eye on the Reserve Bank of India's monetary policy decision later this week, with most analysts expecting the central bank to hold rates steady amid inflation concerns.
