Indian equity benchmarks opened sharply lower on Monday. The BSE Sensex plunged 1,100 points to open at 72,418, while the NSE Nifty50 dropped 332 points to 24,876, slipping below the key 25,000 mark in early trade.
This is because of the escalating military tensions between Iran and Israel, with reported involvement of the United States, that has triggered a global sell-off and pushed crude oil prices higher.
The sharp fall followed fears that widening conflict in the Middle East could disrupt oil supplies, fuel inflation and slow global growth.
Heavyweight IT and banking stocks led the decline. Infosys, HDFC Bank and Reliance Industries were among the biggest drags on the benchmarks. Shares of private lenders and frontline technology firms saw broad-based selling as investors reduced exposure to risk assets.
Oil marketing companies also traded weak on concerns that persistently high crude prices could squeeze marketing margins. Broader markets mirrored the weakness, with mid-cap and small-cap stocks declining in early deals.
However, defence stocks bucked the trend. Bharat Electronics Limited and Hindustan Aeronautics Limited emerged as top gainers on expectations of increased defence spending amid rising geopolitical tensions. Select upstream energy companies also saw buying interest as higher crude prices improved earnings prospects.
Asian markets traded mostly in the red, reflecting a broader flight to safety. Investors shifted funds into gold and government bonds, while emerging market equities faced outflows.
Analysts expect volatility to remain elevated in the near term, with crude oil prices and geopolitical developments likely to dictate market direction.