US-Israel war on Iran: Stocks tank, oil prices surge as tensions escalate

New Delhi: Crude oil prices soared by around 10% in the international markets, while the Indian stock market’s key indices slumped with Sensex losing 1,048 points on Monday, leading to over Rs 6.5 lakh crore erosion in investor wealth, as the conflict in West Asia disrupted the global energy supply chain.

The benchmark Sensex of the BSE slumped 1,048.34 points or 1.29% to 80,238.85 points. It dipped to a low of 78,543.73 points in the intraday. Nifty 50 of the NSE closed 312.95 points or 1.24% down at 24,865.70, after slumping to a low of 24,603.50 points in the intraday. Both indices closed at their lowest level in around five months.

Track latest updates on US-Israel's war on Iran here.

Escalating tensions in West Asia, following the killing of Iran’s Supreme Leader Ayatollah Ali Khamenei in coordinated airstrikes by the US and Israel rattled markets.

Crude prices surged, while the rupee weakened. Price of one barrel of Brent crude surged to around $80 on Monday, from $72.87 recorded on Friday. The rupee crashed to settle at 91.47 against the dollar.

“Rising crude prices and a weakening INR reflect concerns over potential disruptions to oil supply, which could increase inflationary pressures in India and impact fiscals and strain margins for energy and chemical-dependent sectors,” said Vinod Nair, Head of Research, Geojit Investments.

The NSE Nifty India Volatility index ended 25.01% higher at 17.13. Sector-wise, the Nifty Auto ended 2.20% down to become the worst-performing index, while the Nifty Metal rose 0.24% higher and outperformed sectoral indices. The surge in volatility index signals increased uncertainty and risk aversion among market participants. “Investors are rotating toward traditional safe-haven assets and adopting a cautious stance, awaiting greater clarity,” said Nair.

“Traders are advised to remain cautious near crucial support levels and avoid fresh directional positions until a decisive breakout above resistance zones emerges,” said Hitesh Tailor, Research Analyst at Choice Equity Broking.