Indian equity benchmark indices plunged at the opening bell on Monday, with the Sensex crashing more than 2,400 points and the Nifty slipping below 23,750, tracking a sharp global risk-off move after crude oil prices surged above $115 per barrel amid escalating conflict in the Middle East.
At 09:25 am, the Sensex was down 2,401 points or 3 percent at 76,518, while the Nifty fell 727 points to 23,723. Market breadth was sharply negative, with 537 shares advancing against 2,603 declines, while 180 remained unchanged.
The sell-off followed a sharp surge in global crude prices, with Brent crude spiking above $115 per barrel. Analysts said this is a major oil shock to global markets and has raised fears of renewed inflationary pressures.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the spike in crude could have significant implications for oil-importing economies like India. “Brent crude has spiked above $115 delivering a big oil shock to economies and markets. Big oil importers like India will be hit hard if the West Asian conflict lingers long and crude price remains high. The market will price-in the economic consequences of this oil shock,” he said.
He added that inflation could rise regardless of whether the increase in oil prices is passed on fully to consumers, and the uncertainty surrounding the duration of the conflict may continue to weigh on foreign institutional investor sentiment.
Most sectoral indices opened deep in the red, reflecting broad-based selling across the market. The Nifty PSU Bank index plunged about 5.6 percent, emerging as the worst-performing sector, while the Nifty Bank index dropped over 4 percent. The Nifty Auto index declined around 4.3 percent, and the Nifty Oil & Gas index fell nearly 2.9 percent.
Other key sectoral indices also traded sharply lower, with the Nifty Midcap 100 index down about 3.5 percent, the Nifty Realty index falling roughly 3.5 percent, and the Nifty Metal index declining about 3.5 percent.
Among Nifty stocks, Coal India was the only stock trading marginally higher, gaining about 0.3 percent in early trade. On the losing side, InterGlobe Aviation shares plunged 7.7 percent, while Shriram Finance declined about 5.7 percent. Tata Steel and Maruti Suzuki dropped around 5.5 percent each, while State Bank of India, Larsen & Toubro, and Asian Paints also traded sharply lower.
Market volatility surged sharply at the open, with the India VIX jumping more than 20 percent to 24.01, reflecting heightened investor nervousness.
Global markets also came under heavy pressure. Asian equities tumbled in early trade, with Japan’s Nikkei plunging over 6 percent and South Korea’s Kospi sliding sharply, as investors reacted to the spike in oil prices and fears of prolonged disruption to global energy supplies.
According to Devarsh Vakil, Head of Prime Research at HDFC Securities, the surge in oil prices could keep markets under pressure in the near term. “Oil prices have surged sharply amid fears of prolonged disruption to shipping through the Strait of Hormuz. For oil-importing countries like India, markets could remain under pressure until crude prices stabilise or the geopolitical situation shows signs of easing,” he said.
Analysts said the sharp rise in crude prices threatens to push up global inflation and could delay interest-rate cuts by central banks, adding to uncertainty in global financial markets.
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