Indian equity benchmarks Sensex and Nifty opened significantly lower on Monday, with the Sensex crashing 629 points to 77,522 and the Nifty 50 slipping 160 points to 24,172. The market capitalization of BSE-listed firms saw a slight dip, standing at Rs 480.66 lakh crore against Friday's Rs 480.92 lakh crore.
Geopolitical Tensions Fuel Oil Price Surge
The primary driver behind the market's tumble was escalating geopolitical tensions over the weekend. Reports of military attacks between the US and Iran caused significant concern among investors, leading to a surge in global crude oil prices. Brent crude oil rose over 3% to trade near $85 per barrel, sparking fears of supply disruptions on critical shipping routes and potential inflationary pressures.
Banking Stocks Face Profit-Booking Post-Earnings
Adding to the market's woes, the banking sector witnessed substantial profit-booking. Major lenders like Axis Bank, HDFC Bank, and Kotak Mahindra Bank were among the top Sensex losers, falling up to 5.41% in early deals. This sell-off followed their Q1 earnings reports released on Saturday, even though many results largely met analyst estimates. The Nifty Bank index tanked 934 points to 57,586, indicating broad-based weakness in the financial segment.
Market Experts Weigh In
Shrikant Chouhan, Head Equity Research at Kotak Securities, noted that a move below 24,200/77,600 for the Nifty and Sensex, respectively, could weaken sentiment, advising traders to reduce long positions. For Bank Nifty, he highlighted 57,800 as immediate support, with a breach potentially making the uptrend vulnerable.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, emphasized that Brent crude spiking above $90 due to US-Iran tensions represents a strong headwind. He warned that a sustained rise could resurface India's vulnerability to energy shocks, negatively impacting the rupee and foreign portfolio investor (FPI) flows.
Top Gainers and Losers
Among the Sensex constituents, Trent, NTPC, Bharti Airtel, and Tech Mahindra showed resilience, rising up to 2.26%. However, these gains were overshadowed by significant declines in banking and financial stocks, alongside others like IndiGo and Maruti.
Asian markets also mirrored the cautious sentiment, slipping on Monday as the Gulf conflict pushed oil prices higher and stoked inflation fears across the region.