The Indian stock market witnessed a bloodbath in early trade on Monday, with the BSE Sensex plummeting 1,675 points to 75,874 and the Nifty 50 sliding 500 points to 23,555. The nearly 2% crash was triggered by a sharp escalation in geopolitical tensions following the failure of US-Iran ceasefire talks and the subsequent announcement of a US naval blockade of the Strait of Hormuz.
The volatility index, India VIX, surged over 13%, reflecting widespread panic among investors. All sectoral indices were deep in the red, with banking, auto, and realty stocks leading the decline. Heavyweights such as HDFC Bank, Maruti Suzuki, Eicher Motors, and Bajaj Finance were among the top losers. The broader market was not spared either, as small-cap and mid-cap indices dropped significantly, echoing the risk-averse sentiment seen in major Asian markets like the Nikkei and Hang Seng.
The naval blockade has sent shockwaves through the energy market, with Brent crude prices surging over 8% to cross $103 per barrel. Analysts have raised alarms for the Indian economy, noting that over 85% of India’s oil imports are dependent on the Hormuz route. The sudden spike in oil prices threatens to widen the current account deficit, weaken the rupee, and stoke inflationary pressures. With global sentiment turning sharply defensive, experts suggest that high volatility will persist throughout the week as the world watches the unfolding situation in the Middle East.