Sensex, Nifty drop over 1 pc amid heightened Middle East tensions

Indian equity markets opened sharply lower as escalating tensions involving the US, Israel and Iran triggered global risk-off sentiment. Sensex and Nifty fell over 1 per cent, while crude oil surged and Asian markets traded in the red amid war concerns.

Mumbai:  The Indian equity markets opened the week sharply lower on Monday, tracking a broad risk-off sentiment across global markets due to the US-Israel-Iran war.

As of 9.28 am, Sensex lost 891 points, or 1.10 per cent, to reach 80,395 and Nifty eased 268 points, or 1.07 per cent, to 24,909.

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Main broad-cap indices performed in line with the benchmark indices, as the Nifty Midcap 100 declined 1.14 per cent and the Nifty Smallcap 100 lost 1.35 per cent.

All sectoral indices traded in the red, with Nifty realty, oil and gas as well as auto leading the losses, down 2.19 per cent, 1.81 per cent and 1.35 per cent, respectively.

The heightened uncertainty in the Middle East is likely to keep risk appetite subdued throughout the session, analysts said. They added that aviation stocks may remain under pressure following the suspension of flights across key UAE routes, highlighting the immediate operational impact of the regional instability, market watchers said.

Further, weekly Nifty expiry on Monday ahead of the Holi market holiday could intensify volatility, they noted.

Analysts said before the market opening that the formation of a fourth consecutive red candle on Nifty charts and the recent close below the 200-day EMA already reflected increasing bearish dominance and a weakening broader trend.

Technically, resistance is placed in the 25,300-25,350 zone, while immediate support is seen at 25,000-25,050, they said.

Crude oil prices jumped more than 7 per cent, as market participants fear the US-Iran war will have broader regional ramifications that could lead to a major supply disruption.

In Asian markets, airline stocks led losses as airspace closure over the Middle East and airport closures unsettled travel markets. China’s Shanghai index was flat and Shenzhen dipped 0.75 per cent, Japan’s Nikkei declined 1.5 per cent and Hong Kong’s Hang Seng Index plummeted 1.68 per cent. South Korea’s Kospi lost 1 per cent.

The US markets ended largely in the red in the last trading session, as Nasdaq declined 0.92 per cent. The S&P 500 lost 0.43 per cent and the Dow Jones declined 1.05 per cent.