- Indian markets plunged amid Middle East tensions with Nifty down 2.34% at 23,874 by noon
- Nifty has fallen 10% from its record high of 26,340, with all sectors trading in the red
- Rupee weakened sharply to 92.20 against USD due to crude price surge and geopolitical risks
The Indian markets are facing extreme pressure during Monday's trade amid geopolitical tensions brewing in the Middle East. Seeing a slight bit of recovery from the morning crash, Nifty is trading nearly 600 points or 2.34% lower at 23,874 and Sensex trading nearly 1,850 points or 2.31% lower at 77,087, as of 12 noon
Nifty has dropped 10% from its record high of 26,340.
All sectors are trading in the red, with Nifty PSU Bank falling the most by nearly 5%, followed by Auto and Bank which have dipped over 3.5%.
More pain is witnessed in the broader market, with Nifty Smallcap 250 trading with cuts of almost 2.84%. Nifty Midcap 150 is also down around 2.8%.
The India Volatility Index, known as the fear gauge, has also soared to nearly 19% to 23.65, a level last seen during June's 12-day Israel-Iran war.
Here are three key reasons dragging the markets on Monday.
Middle East Tensions
It's the tenth day of the US, Israel-Iran conflict, and no indication of de-escalation is visible from either ends.Mojtaba Khamenei, a son of Iran's late supreme leader, has been named his successor, Iranian state TV announced early on Monday, as the war that began a little over a week ago with his father's killing took a dramatic turn.
The younger Khamenei, who had not been seen or heard from publicly since the war started, had long been considered a contender for the post, even before an Israeli strike killed Ayatollah Ali Khamenei, and despite never being elected or appointed to a government position.
Get the live updates of the US, Israel-Iran war here.
Rupee And Crude Prices
The Indian rupee weakened sharply on Monday, sliding 46 paise to 92.20 against the US dollar, as a surge in global crude prices and rising geopolitical tensions in West Asia triggered a broad risk-off move across financial markets.
The drop marks a significant deterioration from Friday's close of 91.74, pushing the currency near historic lows and underscoring mounting pressure on emerging market currencies amid the ongoing oil shock.
Oil prices surged sharply earlier in the session as traders reacted to fears of supply disruptions in West Asia, one of the world's most important energy-producing regions. Crude prices had earlier spiked close to $120 per barrel in the largest intraday jump on record before easing from the highs later in the session, extending a rally that has seen prices climb nearly 50% over the past two weeks.
ALSO READ: Rupee Slides 46 Paisa To Hit 92.20/$ As Crude Goes On The Boil
Weak Global Cues
Weak US macroeconomic data combined with an ongoing sell-off in AI-related stocks has deepened risk‑off sentiment across global markets, pressuring equities, commodities and cryptocurrencies alike. Foreign institutional investors have continued to pull out of Indian equities, marking their seventh straight day of selling in the cash segment.
On the derivatives side, bearish positioning has intensified, with FII short positions rising to 87% from 85%, the highest level seen so far in the March series — reflecting elevated caution and a preference for defensive positioning across asset classes.
Gaurav Udani, Founder - Thincredblu Securities says that such sharp drawdowns in a short span largely reflect risk-off sentiment driven by geopolitical uncertainty rather than a deterioration in domestic fundamentals.
He notes that, "In situations like these, markets often react first and analyse later. If the conflict intensifies, technical levels may temporarily fail to act as reliable support as panic-driven selling can push prices lower than expected. However, in the absence of further escalation, technical structures remain the best framework to assess potential downside. Looking at longer-term charts, historical averages, and broader pattern formations, the 22,700–23,200 zone appears to be a strong support band for Nifty. This region coincides with key long-term moving averages and prior consolidation levels."
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