Indian stock markets opened deep in the red on Friday, mirroring panic in global markets after Israel launched military strikes on Iran, escalating fears of a prolonged geopolitical crisis in the Middle East.

Sensex tanks over 1,100 points; Nifty dives

At 9:19 am, the BSE Sensex plunged 1,163 points (1.42%) to 80,528, while the Nifty50 dropped 284 points (1.13%) to 24,608. The slide was widespread across sectors.

Oil and gas stocks were the biggest losers, with the Nifty Oil & Gas index down 1.6%. Companies like Mahanagar Gas, IGL, BPCL, and IOC led the decline.

Other key sectoral indices, including Banking, IT, Auto, Metal, and PSU Banks, also fell between 1% and 1.5%.

In the broader market, Nifty Midcap was down 1.1%, and Nifty Smallcap100 fell 1.5%. The total market capitalisation on the BSE dipped by ₹5.52 lakh crore, now standing at ₹444.06 lakh crore.

Why did the market crash today?

  • Israeli attack on Iran fuels Panic

The main reason behind the sharp fall was the Israeli airstrike on Iranian territory early Friday. According to reports, Israel targeted nuclear sites, missile factories, and senior Iranian military leaders in what it called a “preemptive strike.”

Israel claims the action was to prevent Iran from developing nuclear weapons. A state of emergency was announced in Israel, expecting possible Iranian retaliation through missiles or drones.

Iran confirmed the death of Hossein Salami, head of the Revolutionary Guards, along with other top military and nuclear officials, worsening tensions.

While the US had advance knowledge of the strike, Secretary of State Marco Rubio clarified that the US did not participate. He called the strike a "unilateral decision" by Israel.

The timing is also sensitive, as the next round of U.S.-Iran nuclear talks is scheduled this Sunday in Oman.

Market expert Dr. VK Vijayakumar from Geojit Financial Services warned that this could "trigger a prolonged economic and security crisis" if conflict escalates further.

  • Oil prices jump to multi-month highs

Oil prices shot up sharply after the strikes. Brent crude jumped $6.29 (9.07%) to $75.65 per barrel, briefly touching $78.50 — the highest since January 27.

US WTI crude rose $6.43 (9.45%) to $74.47, after hitting $77.62, a level not seen since January 21.

These are the biggest single-day gains in oil since Russia’s invasion of Ukraine in 2022. Analysts fear the situation could worsen if Iran blocks the Strait of Hormuz, a vital oil trade route, leading to a global supply shock.

  • Global markets spooked

The strike triggered sharp losses in markets across Asia, Europe, and the US

  • MSCI Asia ex-Japan index fell 1.1%
  • Japan’s Nikkei dropped 1.3%
  • South Korea’s KOSPI slid 1.1%
  • Hong Kong’s Hang Seng lost 0.8%

In the West, US S&P futures fell 1.7%, Nasdaq futures dropped 1.8%, and Europe’s STOXX 50 futures were down 1.6%.

This comes on top of existing global uncertainty due to volatile trade policies from the US under President Donald Trump, adding more pressure to investors worldwide.

  • Investors shift to safe assets

As fear spread, investors rushed to safe-haven assets.

  • The US 10-year Treasury yield fell to a 1-month low of 4.31%
  • The Swiss franc strengthened 0.4%
  • The Japanese yen rose 0.3%
  • The U.S. dollar index climbed 0.5%, hitting 98.131

This shift signals a clear risk-off sentiment, where investors flee from equities and shift to lower-risk assets.