Indian equity markets opened deep in the red on Monday after US President Donald Trump announced a naval blockade of the Strait of Hormuz, triggering a sharp sell-off across sectors. The BSE Sensex dropped 1,414.33 points or 1.82 per cent to 76,135.92, while the NSE Nifty 50 fell 407 points to 23,643.60 at 9:15 am.
The sharp decline reflects renewed global anxiety after US-Iran negotiations failed to make progress, pushing investors into a risk-off mode. The Strait of Hormuz, a critical artery for global oil supplies, has once again come into focus, sending crude prices above $105 per barrel and raising immediate concerns for inflation, currency stability and India’s import bill.
Markets tumble as geopolitical tensions escalate
Selling pressure intensified across the board, with benchmarks slipping further during early trade. The Sensex at one point plunged 1,675 points or 2.16 per cent to hit an intraday low of 75,874.85, while the Nifty dropped nearly 500 points to around 23,555.
Sectoral indices were uniformly in the red, led by banking, financials, auto, realty and energy stocks. Among major laggards were Bajaj Finance, Eicher Motors, Shriram Finance, Maruti Suzuki, and HDFC Bank. Broader markets also took a hit, with the Nifty Smallcap indices falling around 2 per cent.
Volatility surged, with India VIX climbing over 13 per cent, showing investors are getting jittery and nerves are clearly back in the market.
Oil surge, rupee pressure deepen concerns
Crude oil prices, which had earlier eased to the $94–100 range, have surged back above $105 following the escalation. Brent crude futures climbed 8.61 per cent to $103.40 per barrel, while US WTI rose 9.38 per cent to $105.63.
The Indian rupee weakened by 66 paise to 93.35 against the US dollar, reflecting pressure from rising oil prices and concerns over the current account deficit.
Analysts said the situation is particularly critical for India, which relies on the Hormuz route for over 85 per cent of its crude imports. Higher oil prices could widen the current account deficit, weaken the rupee and push inflation higher.
Experts urge caution amid ‘risk-off’ sentiment
Ajay Bagga, Banking and Market Expert, told ANI, “I would say we have to be very cautious about the Indian market. There might be a ‘Trump pump’ this evening because why would he post all this on Sunday? That was basically to make Asian markets panic, and you could see a pivot before the US market opened when all shots were in place. You have to just wait and watch and conserve your capital. As retail investors, that’s the best we can do in this scenario. Banks are making solid money. Retail investors get butchered in this kind of scenario. So stay away, is what I would say, from trading.”
He added that geopolitical risks have overtaken earnings as the primary market driver. “Last Wednesday, there was hope in the markets that something was coming by when the ceasefire and the talks were announced. But that momentum has faded. So we are again getting negative on the Indian markets and against the earnings driving the market, its geopolitical risk which will drive the markets.”
Bagga also warned of a tightening oil supply situation. “Even over the weekend, what was happening, if 40 people were asking for oil, only four were getting fulfilled. So what that is pointing out is that there is a shortage, plus you are having to pay anything from USD 120 to USD 140 per barrel.”
He cautioned investors against trying to time the market. “Not the time to trade. Invest; do your discipline monthly investment through the SIP route. Do not try to time this market because I don’t think the bottom has formed, but nobody knows when the bottom will be formed.”
Global cues worsen outlook for Indian markets
Ponmudi R, CEO of Enrich Money, told ANI, “Global sentiment has turned sharply risk-averse following a renewed escalation in geopolitical tensions. The earlier relief from the temporary US-Iran ceasefire has reversed, as reports indicate that the US has moved to restrict access through the Strait of Hormuz following failed negotiations.”
He said the development was crucial given the strategic importance of the route. “Crude oil prices, which had corrected from above $110 to the $94-100 range, have now surged back above $105, reintroducing inflationary and macro concerns.”
Asian markets also traded lower, with Japan’s Nikkei, Hong Kong’s Hang Seng and South Korea’s KOSPI all slipping over 1 per cent. Wall Street ended mixed in the previous session.
Wider economic risks emerge
Bagga pointed to broader economic risks, noting that India’s annual energy import bill could rise sharply from about $150 billion to as much as $225–250 billion at current prices.
He also flagged disruptions to trade and remittances, saying around 20 per cent of Indian exports could face hurdles due to constraints in key shipping routes. The crisis could also impact Indian workers in the Gulf, with about nine lakh people already returning home as jobs dry up.
“Caution on the Indian markets, caution on the global markets, conserve capital right now, not the time to go bottom picking because you might be catching falling knives and get hurt in the process,” he said.