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Indian equity benchmarks recovered partially from their intraday lows on Monday after both the Nifty 50 and Sensex slipped into correction territory during a volatile trading session. The Nifty 50 was trading 2.3% lower at 23,995 after falling as much as 3.1% earlier in the day, while the Sensex was down 2.2%, or 1,783 points, at 77,135. The 30-share index had dropped as much as 2,500 points during intraday trade before trimming some losses. The decline pushed both indices into correction territory, with the Nifty falling more than 10% from its record high and the Sensex dropping about 11% from its all-time peak.
The selloff in Indian equities came amid heightened global uncertainty as the conflict involving Iran, the United States and Israel entered its ninth day, triggering volatility across global financial markets. 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.
Elsewhere in Asia, Japan's Nikkei fell 6.98% to 51,740.46, while South Korea's Kospi dropped 6.98% to 5,195.15. Taiwan declined 5.42% to 31,777.48, and Australia's ASX 200 was down 3.87% to 8,508.4. Hong Kong slipped 2.51% to 25,110.25; Shanghai fell 1.07% to 4,080.1, and Shenzhen eased 2.42% to 13,829.872.
Nifty 50 is about 10% off its record high and the Sensex is around 11% below its peak, putting both in correction territory after Monday’s selloff. The move comes amid an escalation in the Iran-United States-Israel conflict and a sharp rise in oil prices, with Brent up to $119.50 and WTI up to $119.48 during the session.
The analysis cited in the update says the Nifty 50’s median drawdown during geopolitical events is about 4.1%, with a typical reversal within 0.1 months. It lists drawdowns of about 0.6% during the Kargil conflict and 0.7% during Israel-Iran tensions, while larger moves included 7.9% during the Iraq war and about 7% during the Russia-Ukraine war, followed by rebounds. It also cites deeper declines such as about 9.8% during the Libyan civil war, around 8.9% during the Syrian civil war and about 5.9% during the Israel-Hezbollah conflict before markets recovered.
The rupee weakened by 46 paise against the US dollar to 92.20
- Harshal Dasani, Business Head, INVAsset PMS
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