Benchmark stock market indices took a sharp downturn on Monday amid escalating tensions in the Middle East following Iran's retaliatory attack on Israel over the weekend.
Investor concerns about the potential for a wider regional conflict led to a significant increase in volatility on Dalal Street.
At 9:20 am, the S&P BSE Sensex was down 644.52 points at 73,600.38, while the NSE Nifty50 plummeted 186.80 points to 22,332.60.
The broader market indices also experienced notable declines as a result of the heightened geopolitical tensions.
Most major sectoral indices were trading in negative territory, with high-weightage sectors like Nifty Bank and Nifty Financial Services each dropping over 1%. All sectoral indices were down by 1% or more except Nifty IT, which saw a 0.3% increase following Tata Consultancy Services' better-than-expected Q4 earnings performance.
Only five stocks were trading positively on the Nifty50, including Hindalco, ONGC, TCS, Nestle India, and HCLTech.
The remaining stocks were in the red, with notable declines observed in oil and gas companies like BPCL and Coal India.
Analysts are concerned that the domestic markets could face more significant impacts if the conflict between Iran and Israel escalates further. Manoranjan Sharma, chief economist at Infometrics Ratings, highlighted the possibility of further escalation and retaliatory strikes by Israel, creating uncertain times for global stock markets.
Shrey Jain, Founder and CEO of SAS Online, emphasized the importance of monitoring the responses from Israel and the G7. He noted that further escalation in the conflict could lead to increased crude oil prices, pushing inflation upwards and reducing the likelihood of a rate cut, thus affecting the valuations of stocks, including Indian equities, especially when they are not trading at cheap levels.
