Mumbai: Indian stock markets opened sharply lower on Monday, with benchmark indices falling nearly 2 per cent each, tracking weak global cues after the failure of US-Iran peace talks and renewed geopolitical tensions.

The benchmark BSE Sensex plunged as much as 2.16 per cent, or 1,675 points, to an intraday low of 75,874.85 in early trade. Meanwhile, the Nifty 50 dropped around 2.05 per cent, slipping nearly 500 points to trade at 23,555.

Stock market crash in India: Banking, auto and energy stocks lead losses

Heavy selling pressure was seen across banking, financial services, auto, realty and energy stocks.

Top laggards included Eicher Motors, Maruti Suzuki, Shriram Finance, Bajaj Finance and HDFC Bank, as broader market sentiment weakened sharply.

All sectoral indices were trading in the red, indicating widespread risk-off sentiment across domestic equities.

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Small-cap stocks hit hardest; volatility spikes

Broader markets saw sharper declines, with small-cap indices underperforming.

The Nifty Smallcap 100 fell around 2 per cent, while the Nifty Smallcap 250 also declined nearly 2 per cent, mirroring losses in midcap and large-cap segments.

Market volatility surged, with the India VIX rising more than 13 per cent, signalling heightened investor fear and uncertainty.

Geopolitical tensions push crude oil above $105

Analysts said sentiment has turned sharply risk-averse following renewed escalation in West Asia after the breakdown of US-Iran negotiations.

Crude oil prices, which had earlier eased from above $110 to the $94–100 range, rebounded sharply as supply concerns resurfaced.

Brent crude surged to $103.40 per barrel, up 8.61 per cent, while US WTI crude jumped 9.38 per cent to $105.63.

Impact on India: inflation, rupee and fiscal pressure

Market experts warned that rising crude prices could have significant macroeconomic implications for India, which imports over 85 per cent of its oil requirements.

Higher oil prices are expected to widen the current account deficit, weaken the rupee, and increase inflationary pressure, particularly if volatility in global energy markets persists.

Global markets are also under pressure

Asian markets traded lower, with Japan’s Nikkei, Hong Kong’s Hang Seng and South Korea’s KOSPI all declining over 1 per cent each.

On Wall Street, the S&P 500 closed marginally lower, while the Nasdaq managed slight gains, reflecting mixed sentiment amid ongoing geopolitical uncertainty.

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Market outlook: volatility expected to remain high

Analysts expect continued volatility in the near term, driven by geopolitical developments, inflation data releases and corporate earnings announcements.

The sharp correction highlights growing investor sensitivity to global energy supply risks and Middle East tensions, particularly around the strategic Strait of Hormuz shipping route.

IANS