Sensex, Nifty hit 11-month low amid oil price surge

Indian stock markets declined sharply on Monday, with benchmark indices Sensex and Nifty 50 dropping to their lowest levels in nearly 11 months. The fall came amid rising crude oil prices and growing global concerns linked to the ongoing conflict involving Iran.

During intraday trading, the S&P BSE Sensex dropped as much as 2,494 points, or about 3.16%, to reach 76,424.55 points. At the same time, the NSE Nifty 50 index fell around 3.07%, touching an intraday low of 23,697.80 points.

The decline reflects broader market concerns about rising energy prices and the potential economic impact of geopolitical tensions.

Oil price surge weighs on markets

One of the major factors behind the decline is the sharp rise in global crude oil prices. Brent crude prices moved close to $120 per barrel, their highest level in several months.

The increase follows fears of supply disruptions as tensions escalate in the Middle East. Energy markets have reacted strongly to concerns that shipping routes through the Strait of Hormuz, a key global oil transit route, could face prolonged disruptions.

Additional supply pressures have also emerged after reports that some oil-producing countries in the region have reduced output.

Broad-based selling across stocks

Selling pressure was visible across most sectors of the market.

Market data showed that almost all companies in the Nifty 500 index were trading in the red. Within the Nifty 50, Coal India was among the few stocks showing gains while most others declined.

Mid-cap and small-cap indices also fell, each dropping by about 1.8% during the trading session.

Meanwhile, the India VIX, often referred to as the market’s volatility index, surged more than 20%, reaching its highest level since July 2024. Rising volatility typically indicates increased uncertainty among investors.

According to market estimates, the sharp fall erased roughly ₹12 lakh crore in investor wealth during the session.

Energy shock impacts specific sectors

Several sectors that are sensitive to fuel prices saw notable declines.

Oil marketing companies such as BPCL and HPCL reportedly dropped by as much as 8% as investors reacted to rising crude prices.

Airline stocks were also affected due to the potential increase in jet fuel costs. Shares of IndiGo and SpiceJet reportedly declined by up to 7.5%.

Higher fuel prices can significantly increase operating costs for airlines and transportation companies, which often affects investor sentiment.

Analysts warn of inflation risks

Market analysts say prolonged high oil prices could have wider economic consequences for India.

V.K. Vijayakumar, chief investment strategist at Geojit Investments Ltd., said that major oil-importing countries like India could face economic pressure if crude prices remain elevated.

According to him, higher energy costs could increase inflation and affect economic growth if the trend continues.

India imports a large portion of its crude oil requirements, which makes the economy sensitive to fluctuations in global energy prices.

Impact of geopolitical tensions

The market reaction also reflects broader geopolitical developments in the Middle East.

Analysts say the ongoing conflict has increased uncertainty about global energy supplies and shipping routes.

If tensions continue or supply disruptions persist, economists warn that higher fuel prices could affect production costs, corporate margins and overall economic stability.

Foreign investor selling adds pressure

The market decline has also been influenced by selling by foreign institutional investors (FIIs).

Exchange data showed that foreign investors sold shares worth about ₹6,030 crore on Friday. This selling offset purchases worth ₹6,972 crore made by domestic institutional investors.

Capital outflows from emerging markets often occur during periods of global uncertainty as investors move funds to relatively safer assets.

Market outlook

Market participants are closely monitoring geopolitical developments and crude oil price movements for further direction.

Analysts say the future trajectory of Indian markets will largely depend on how energy prices behave in the coming weeks and whether geopolitical tensions begin to ease.

Until clearer signals emerge, investors are expected to remain cautious amid ongoing global uncertainty.