Markets experienced a sharp crash on Monday, with the Sensex declining over 700 points or nearly 1% to an intraday low of 77,444.79 and the Nifty 50 falling as much as 0.8% to 24,149.90. As of 10:15 am, the BSE Sensex was down 508 points, or 0.7% at 77,639.31, while the NSE Nifty 50 declined 125 points, or 0.5% to 24,209.20. This represents a significant escalation from the previous session's sharp gains, with the selling pressure driven by Iran-US war escalations and rising oil prices. The India VIX, a gauge of the market's expectation of volatility over the near term, gained more than 3% to 13.60, reflecting increased uncertainty among investors. The selling pressure was broad-based, with State Bank of India (down 5%) and HDFC Bank (down 5%) being major Nifty drags, while the Nifty Private Bank index crashed more than 2% to lead sectoral losses.
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, noted that "frontline indices continue to trade in tandem with their respective 100-day EMAs since the second week of June," with the 24,050–24,070 zone now acting as crucial near-term support and the 24,300–24,320 zone as crucial near-term resistance. On the Sensex, Shah pegged support at 77,100 and resistance at 77,900. As reported by The Economic Times, Rupak De, Senior Technical Analyst at LKP Securities, noted that "Nifty continues to trade above its critical moving averages, with the RSI entering a bullish crossover. In the near term, the index is likely to remain strong, with the potential to advance towards the 24,800 level. On the downside, immediate support is placed at 24,200. A decisive fall below this level could trigger a phase of consolidation." The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, added 3.53% to 13.75, reflecting increased uncertainty among investors.
Banking shares were among the biggest drags on the market despite several lenders reporting their June quarter earnings over the weekend. HDFC Bank fell as much as 5.1% to ₹777.50 and Axis Bank declined as much as 6% to ₹1,249.05 after their standalone earnings were announced on Saturday. Among the gainers on the Sensex, Tech Mahindra gained more than 1%, followed by Bharti Airtel and ICICI Bank, which also rose more than 1%. According to Ponmudi R, CEO of Enrich Money, "sustaining above the 58,000 psychological level remains crucial to reinforce bullish momentum and support a further recovery towards the 58,400–58,600 resistance zone," with 57,800 acting as immediate support. The heavyweight private lenders had announced their June quarter results on Saturday, with the stocks reacting negatively to the earnings print. Among the Nifty 50 constituents, JSW Steel, Trent, and NTPC were the top gainers, whereas Axis Bank and HDFC Bank emerged as the biggest laggards, dragging the benchmark lower.
Market participants are closely monitoring developments in West Asia after renewed tensions between the United States and Iran pushed crude oil prices sharply higher. Brent crude rose nearly 4% to above $91 a barrel, its highest level since mid-June, after military exchanges widened beyond conventional targets. The Islamic Revolutionary Guard Corps said on Monday that two oil tankers had exploded and been immobilised after attempting to transit what it described as an unsafe southern route through the Strait of Hormuz, alleging they had been encouraged by the U.S. military to use the passage. Higher crude prices are being watched closely as they could fuel inflationary pressures and increase costs for oil-importing countries such as India. Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said markets are currently facing both positive and negative influences, noting that "the strongest headwind is Brent crude spiking above $90 on escalating tensions between US and Iran. If this trend continues, India's vulnerability to energy shock will resurface with negative implications for the rupee and FPI flows."
Market sentiment remained subdued due to multiple global factors impacting investor confidence. Weak global cues weighed on sentiment as Asian equities traded lower, reflecting a cautious risk-off mood among investors. The South Korean equity index, the KOSPI, was trading over 3.96% lower, down 241 points, at 6,579.23, while Japan's Nikkei 225 dropped 4.03%. However, other regional markets showed mixed performance, with Hong Kong's Hang Seng rising 2.02%, China's Shanghai Composite gaining 0.89% and Australia's S&P/ASX 200 adding 0.16%. Softness in overseas markets often influences domestic equities, as global risk aversion prompts foreign investors to trim exposure to emerging markets, including India. Geopolitical uncertainty continued to weigh on market sentiment after the US Central Command (CENTCOM) reportedly launched another round of strikes against Iran, marking the ninth consecutive night of military operations. Escalating tensions in the Middle East have increased risk aversion among investors, leading to broad-based selling across equity markets.
