Equities skid on Iran-Israel escalation; Sensex drops 2,700 pts, Nifty below 24,700
Domestic equity markets opened sharply lower on Monday amid rising tensions and military escalations in the Middle East, dampening investor sentiment.
The Nifty 50 index opened at 24,659.25, down 519.40 points or 2.06 per cent. The BSE Sensex fell 2,775.14 points or 3.41 per cent to open at 78,512.05, reflecting heightened nervousness across equities.
Market expert Ajay Bagga said that global markets are grappling with uncertainty.
“Markets are searching for some moorings in a deeply uncertain world today. Reports that the Iranian Foreign Minister said Iran is not going to block the Straits of Hormuz and that the new Iranian leadership wants to resume negotiations with the US led to a slight recovery in risk assets from their deep red levels this Asian morning,” Bagga said.
He noted that Indian markets will assess three key risks arising from the Iran–US conflict.
“The first risk transmitter is higher oil prices due to the de facto closure of the Straits of Hormuz. The second is the impact on major trading partners of India in the Gulf, with Indian exporters likely to be affected due to disruptions in shipping lanes and supply chains. The third is the risk to nearly nine million Indians working in the Middle East,” he said.
Bagga added that a return to negotiations by the new Iranian leadership, uninterrupted passage of tankers through the Straits of Hormuz, and an end to attacks on GCC targets would help stabilise markets.
“The worst outcome is known to all and remains a low-probability event,” he added.
Broader markets also witnessed significant selling pressure. On the NSE, the Nifty 100 declined over 2 per cent, while the Nifty Midcap 100 fell 3.43 per cent and the Nifty Smallcap 100 dropped 3.78 per cent.
Among sectoral indices, Nifty Auto declined 3.42 per cent, Nifty FMCG fell 2.3 per cent, and Nifty IT slipped 1.91 per cent, indicating broad-based selling in early trade.
Sunil Gurjar, SEBI-registered analyst and Founder of Alphamojo Financial Services, said the benchmark index has slipped below its 200-day Exponential Moving Average (200-EMA), signalling emerging long-term weakness in market structure.
“The decline was largely driven by global market weakness and rising bond yields, which reduced risk appetite among investors,” he said.
He added that sustained closing below the 200-EMA in the coming sessions could trigger further downside. “However, a strong rebound from this level may indicate that support is holding and could restore positive momentum,” he said.
In the commodity markets, gold prices surged 3 per cent to Rs 1,67,329 per 10 grams for 24 karat gold, while silver rose 3.89 per cent to Rs 2,85,700 per kilogram.
Other Asian markets also traded lower. Japan’s Nikkei 225 fell 1.55 per cent to 57,930, Singapore’s Straits Times declined 1.86 per cent to 4,903, Hong Kong’s Hang Seng dropped over 2 per cent to 26,113, and Taiwan’s weighted index fell 0.33 per cent to 35,297.
In the United States, Dow Jones Futures were down 0.77 per cent at 48,593, indicating continued pressure. On Friday, the S&P 500 declined 0.43 per cent to 6,878, while the Nasdaq fell 0.94 per cent to 22,663.
