Indian benchmark indices came under heavy selling pressure on Monday, with both the Nifty 50 and Bank Nifty falling more than 1% in early trade amid weak global cues and cautious investor sentiment.
The decline was broad-based, with banking, financial and heavyweight stocks leading the losses.
The Nifty 50 slipped to an intraday low of 23,070.15, down about 1.2% from Friday’s close of 23,366.70. The Bank Nifty dropped to 54,195.20 from its previous close of 54,781.60.
Here are four factors that weighed on the market:
1. Rising tensions in West Asia
Fresh geopolitical concerns resurfaced after Iran launched missiles at Israel on Sunday.
According to reports, US President Donald Trump urged Israeli Prime Minister Benjamin Netanyahu not to retaliate, warning that military action could disrupt ongoing negotiations aimed at ending the three-month conflict.
Trump also called on Iran to return to the negotiating table.
The missile strikes marked the first major escalation since a ceasefire took effect in early April. Iran’s state broadcaster confirmed the attacks, while Tehran closed its western airspace ahead of a possible Israeli response.
The renewed tensions triggered risk aversion across markets.
2. Crude oil prices surged
Oil prices climbed sharply on fears of supply disruptions.
- Brent crude rose to $96.39 a barrel
- WTI crude advanced to $93.76 a barrel
Higher oil prices are generally seen as negative for India, which imports most of its crude requirements.
Rising crude costs can:
- Push up inflation
- Increase the trade deficit
- Hurt overall market sentiment
3. Foreign investors continued to sell
Foreign institutional investors remained net sellers on Friday.
FIIs sold equities worth around ₹8,776 crore.
Domestic institutional investors partly offset the outflows by buying shares worth ₹9,133 crore. However, the support from domestic investors was not enough to lift sentiment.
Market participants also remained cautious following the Reserve Bank of India’s latest inflation and growth projections.
4. Weakness in precious metals reflected stronger dollar sentiment
Gold and silver prices declined sharply on Monday.
On the MCX:
- Gold August futures fell 1.27% to ₹1,53,695 per 10 grams
- Silver July futures dropped 2.35% to ₹2,42,763 per kg
In the international market, gold slipped nearly 0.7% to around $4,300 an ounce.
The decline came as investors assessed the latest developments in West Asia and a stronger dollar weighed on bullion prices.
TL;DR:
Indian markets fell more than 1% on Monday as escalating tensions between Iran and Israel, higher crude oil prices, persistent FII selling and weak global sentiment triggered broad-based selling.
AI Summary:
- Nifty 50 and Bank Nifty fell more than 1% in early trade.
- Rising tensions between Iran and Israel hurt sentiment.
- Brent crude climbed to $96.39 a barrel.
- FIIs sold shares worth ₹8,776 crore on Friday.
- Gold and silver prices also declined sharply.
