Sensex Plunges 750 Points, Nifty Falls Below 23,850 As Oil Prices Surge Amid Iran-US Conflict

Stock Market Today, September 2: Indian benchmark indices opened sharply lower on Wednesday as renewed US-Iran hostilities and a surge in crude oil prices triggered fresh concerns among investors.

The BSE Sensex fell around 750 points, or 0.98%, to 76,193.82 in early trade, while the Nifty50 dropped 235 points, or 0.98%, to 23,820.75. Broader markets also weakened, with the Nifty Midcap 100 declining 1.22% and the Nifty Smallcap 100 losing 1%.

Market volatility increased as the India VIX climbed 2.84% to 11.82, reflecting heightened investor caution amid the worsening geopolitical situation.

IT, Realty and Auto Stocks Lead Declines

Selling was visible across most sectors in early trading. The Nifty IT index dropped 2.47%, followed by Nifty Realty, which declined 1.97%, and Nifty Auto, down 1.83%.

Cement, Financial Services ex-Bank and Mid-Smallcap IT & Telecom stocks were also among the major losers. Pharma and Healthcare stocks showed relative resilience, slipping only 0.10% and 0.17%, respectively.

The market pressure came as crude oil prices jumped following a fresh escalation in the US-Iran conflict. Brent crude surged nearly 5% overnight, approaching $96 a barrel, raising concerns about inflation, corporate costs and India’s oil import bill.

V K Vijayakumar, chief investment strategist at Geojit Investments, said Indian equities were caught between strong domestic fundamentals and mounting global risks.

He pointed to robust first-quarter GDP growth, healthy GST collections, credit expansion, automobile sales and improving earnings prospects as key domestic positives. However, he warned that the escalation in the US-Iran conflict and the sharp rise in crude prices could weigh on market sentiment.

Vijayakumar said India’s current account deficit and foreign exchange reserves provide some cushion against higher oil prices, but warned that rising US bond yields could pose a larger threat to global equities.

He said investors should closely monitor the US 10-year Treasury yield, noting that a move towards 5% could trigger a significant correction across global equity markets.

Oil Prices Rise As US-Iran Tensions Escalate

The latest market sell-off followed reports that the US launched a fresh series of overnight airstrikes against targets in Iran. Tehran responded with attacks of its own, marking the most serious escalation between the two countries in several weeks.

The Islamic Revolutionary Guard Corps warned that the US strikes could further restrict traffic through the Strait of Hormuz, a crucial global energy route that handled roughly one-fifth of the world’s oil consumption before the conflict.

The prospect of prolonged disruption in the waterway has intensified concerns over global energy supplies and pushed crude prices higher.

Ponmudi R, CEO of Enrich Money, said Indian equities were likely to remain under pressure as higher crude prices and rising global bond yields added to geopolitical risks.

He said India’s resilient domestic economy could provide some support, but external factors were likely to determine the market’s near-term direction.

Crude has emerged as the key risk for Indian stocks, with WTI prices rising more than 8% over the previous two sessions following the renewed military confrontation between Washington and Tehran.

Brent crude futures were up 75 cents, or 0.8%, at $95.40 a barrel by 0345 GMT, while US West Texas Intermediate futures gained 44 cents, or 0.5%, to $90.66. Both benchmarks had surged more than $4 on Tuesday, marking their biggest single-day gains since late July.

With crude prices, US bond yields and the Strait of Hormuz emerging as major risk factors, investors are likely to remain cautious as they assess the impact of the latest geopolitical escalation on inflation, corporate earnings and India’s broader economic outlook.