The Indian markets are facing intense pressure during Monday's trade amid geopolitical tensions brewing in the Middle East, with the Nifty trading over 300 points 520 points or 1.2% lower at 24,861 and Sensex trading over 1,000 points or 1.27% lower at 80,245, as of 10:30 am.
All sectors, barring Defence, are trading in the red, with Nifty Realty falling the most by over 2%
However, more pain is witnessed in the broader market, with Nifty Smallcap 250 trading with cuts of almost 1.36%. Nifty Midcap 150 is also down around 1.09%.
The India Volatility Index, known as the fear gauge, soared to a nine-month high today. The India VIX jumped nearly 20% to 16.38, 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
The Middle East crisis has intensified, with the US and Israel's war against Iran entering its third day, keeping the region on edge. Washington announced it had struck and destroyed the headquarters of Iran's Islamic Revolutionary Guard Corps (IRGC) in a major offensive. At the same time, the Israeli military carried out extensive attacks on Hezbollah positions across Lebanon on Monday following rocket fire attributed to the Iran‑backed group, and also launched strikes on Tehran.
The escalating conflict continues to shake global markets, sending equities lower worldwide while driving investors toward safe‑haven assets such as gold and government bonds.
Iran's President Masoud Pezeshkian condemned the killing of Supreme Leader Ayatollah Ali Khamenei in the US‑Israeli strikes, calling it a “declaration of war against Muslims.” Casualties have been reported across Gulf nations — including the UAE, Qatar and Kuwait — as Iran responded with drone and missile attacks on multiple targets. With airspace closures sweeping across the region, global aviation has been thrown into disarray, forcing widespread flight diversions and cancellations.
ALSO READ: Iran War Live Updates: US Releases Video Footage Of Its Strikes On Iran | Watch
Higher Oil Prices And Rupee Under Pressure
Oil prices soared to their highest levels in four years as intensifying conflict involving Iran choked off tanker movements through the Strait of Hormuz, one of the world's most vital energy corridors. Brent crude surged as much as 13%, climbing above $82 a barrel — its strongest level since January 2025 — while West Texas Intermediate traded near $72.
The dramatic jump came after shipping activity through the strait largely ground to a halt, with shipowners and commodity traders voluntarily suspending voyages amid the rapidly expanding hostilities.
ALSO READ: Oil Prices Today: Brent Soars To $80 As US-Iran Conflict Spur Supply Worries From Gulf
This has pushed the rupee under pressure. The rupee opened 27 paise lower at 91.25 to the dollar. The dollar index, which tracks the index against a basket of major currencies, surged 0.3% amid Middle East crisis.
Trade Disruptions
Indian refiners have built a sizable buffer against immediate supply shocks, with crude inventories sufficient for at least 10 days of demand and fuel stocks covering an additional 5–7 days, offering short‑term protection from any brief disruption in shipments. Despite rapidly escalating tensions in West Asia, officials say contingency measures are already in place — including switching to diversified crude suppliers across the US, West Africa, Latin America and Russia, as well as drawing on strategic petroleum reserves if needed.
The Strait of Hormuz, one of the world's most strategically vital energy corridors, carries nearly 20% of global petroleum liquids and around one‑fifth of global LNG flows. For India, its importance is even more pronounced: 2.5–2.7 million barrels per day — nearly half of the country's total crude imports — move through the strait, largely sourced from Iraq, Saudi Arabia, the UAE and Kuwait.
In addition, about 60% of India's LNG imports and almost all of its LPG shipments depend on safe passage through this narrow waterway, underscoring how central the strait remains to India's broader energy security framework.
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