Sensex, Nifty drop over 1 pc over heightened Middle East tensions

Indian equity benchmarks opened the week on a sharply negative note on Monday, mirroring a broad risk-off sentiment sweeping global markets as escalating tensions between the United States, Israel and Iran rattled investor confidence.

At 9:28 am, the BSE Sensex had plunged 891 points, or 1.10 per cent, to 80,395, while the Nifty 50 slipped 268 points, or 1.07 per cent, to trade at 24,909.

Broader markets mirrored the weakness in frontline indices. The Nifty Midcap 100 declined 1.14 per cent, while the Nifty Smallcap 100 fell 1.35 per cent, indicating widespread selling pressure.

All sectoral indices traded in the red, with realty, oil and gas and auto stocks leading the losses. The Nifty Realty index dropped 2.19 per cent, oil & gas fell 1.81 per cent, and auto stocks shed 1.35 per cent in early trade.

Market analysts attributed the sell-off to heightened geopolitical uncertainty in the Middle East, which is expected to keep risk appetite subdued throughout the session. Aviation stocks are likely to remain under pressure following the suspension of flights across key UAE routes, highlighting the immediate operational impact of regional instability, market watchers noted.

Volatility may intensify further due to the weekly Nifty expiry on Monday, ahead of the upcoming Holi market holiday.

Technical indicators also signalled growing weakness. Analysts observed that the formation of a fourth consecutive red candle on the Nifty chart, coupled with a recent close below the 200-day exponential moving average (EMA), reflects strengthening bearish momentum and a weakening broader trend. Immediate resistance is seen in the 25,300–25,350 zone, while support lies at 25,000–25,050.

Meanwhile, crude oil prices surged over 7 per cent amid fears that the US-Iran conflict could escalate into a broader regional crisis, potentially disrupting global energy supplies.

Asian markets also reflected the nervous mood. Airline stocks led losses as airspace closures across parts of the Middle East unsettled travel markets. Japan’s Nikkei 225 fell 1.5 per cent, Hong Kong’s Hang Seng Index dropped 1.68 per cent, and South Korea’s Kospi declined 1 per cent. China’s Shanghai Composite was largely flat, while Shenzhen slipped 0.75 per cent.

Wall Street had ended the previous session mostly lower, with the Nasdaq Composite down 0.92 per cent, the S&P 500 falling 0.43 per cent, and the Dow Jones Industrial Average declining 1.05 per cent.

With geopolitical tensions escalating and oil prices surging, investors are bracing for heightened volatility in the sessions ahead.

Meanwhile, gold and silver prices rallied more than 3 per cent on Monday as escalating US-Iran tensions and Israeli strikes on Tehran triggered a global risk-off sentiment, driving investors toward safe-haven assets.

On the MCX, gold April futures climbed 3.12 per cent to Rs 1,67,155 per 10 grams intraday, while silver March futures advanced 3.04 per cent to Rs 2,91,249 per kg.

The surge followed Israeli strikes on Iranian command centres and air defences, met by retaliatory missile attacks on Israeli territory and US bases in the Gulf, intensifying fears of a broader regional conflict. Concerns over potential disruption of crude supplies through the Strait of Hormuz further supported bullion.

“Gold extended last week’s gains amid the US-Iran war, while uncertainty over US tariff policy added to macro risks,” said Manav Modi of Motilal Oswal Financial Services.

Crude oil prices jumped over 7 per cent on supply disruption fears, while the dollar index rose 0.24 per cent to 97.85, limiting further upside in bullion.

Market participants now await key global PMI data and US labour market cues for direction. Gold’s latest rally adds to its strong 2025 performance, driven by central bank buying, ETF inflows and expectations of US monetary easing, with major global banks projecting further upside in the coming years.

With IANS inputs