Sensex drops as Brent hits $106.75, rupee at 95.63

Market opens sharply lower on global risk-off cues

Indian benchmark indices opened sharply lower at the start of the week as weak global cues combined with escalating conflict in the Middle East and a sudden rise in crude oil prices. The selling followed a rough run of sessions in which risk appetite weakened steadily on geopolitics, currency pressure, and persistent foreign outflows.

In early trade, the Sensex was reported to be down over 350 points and the Nifty lower by more than 100 points amid concerns over stalled US-Iran talks and surging crude. The mood stayed cautious as investors tracked headlines around the Strait of Hormuz and the impact of oil shocks on India’s inflation and external balances.

Friday’s slide sets the tone: foreign selling and monsoon worry

The pressure in Indian equities was visible even before the latest escalation in West Asia. Markets saw a sharp downturn on Friday, when both the Sensex and the Nifty fell significantly.

The decline was linked to persistent foreign investor selling and concerns over a predicted low monsoon. Alongside these local factors, anxiety around the Iran-US conflict and rising oil prices contributed to a negative risk backdrop and higher volatility.

Wednesday’s sell-off: Sensex down over 760, Nifty below 23,300

Mid-week trading saw another sharp risk-off move. On Wednesday, benchmark indices opened sharply lower, with the Sensex plunging more than 760 points and the Nifty slipping below the 23,300 mark.

The key trigger cited was renewed uncertainty surrounding the possibility of a US-Iran peace deal. At the same time, crude oil prices moved higher and foreign investor concerns remained in focus. A sharp reversal in IT stocks added to the downside, with profit-booking and sector-specific selling amplifying index losses.

Tuesday extends losses: crude spike, record-low rupee, broad selling

Losses deepened on Tuesday morning with a broad-based selloff across sectors. The Sensex was reported to be down nearly 800 points, while the Nifty slipped below the 23,650 mark.

This session was shaped by three linked pressures: surging crude oil prices, a record-low rupee, and escalating geopolitical tensions. Investor sentiment was described as fragile amid fears that a prolonged US-Iran conflict could keep energy prices elevated and sustain volatility.

Key drivers: crude, geopolitics, IT selling, and policy signals

A major market headwind was crude oil, with Brent rising 2.45% to $106.75 per barrel in one of the reported sessions. Elsewhere in the coverage, Brent was also described as sustaining above $110 per barrel, and oil prices were said to have moved back above $100 per barrel after hovering near $15 the previous week.

Geopolitics remained the other dominant driver. US President Donald Trump was cited as saying the ceasefire with Iran was at its “weakest” and on “massive life support.” In another development, Trump ordered US military forces to begin blockading the Strait of Hormuz and clearing suspected sea mines after talks brokered in Islamabad failed to yield an agreement.

IT stocks were another pressure point. On Tuesday, the Nifty IT index fell 3.7%, hitting its lowest level since May 2023. The selling came a day after OpenAI said it is launching a new company backed by more than $1 billion to help organisations build and deploy AI.

Separately, Bengaluru-based real estate and jewellery shares were reported to be under pressure for a second straight day after Prime Minister Narendra Modi exhorted Indians to curb gold purchases for the next one year and work from home to temper the fuel crisis amid the West Asia conflict.

Currency and volatility: rupee at record low, India VIX rises

The rupee weakened as crude rose and risk aversion increased. It depreciated 35 paise to hit a record low of 95.63 against the US dollar in one report. In another session, the rupee was cited as dropping 56 paise to close at 93.39.

Volatility indicators also reflected the uncertainty. India VIX rose 2% to 18.87, signalling elevated near-term risk perception.

Foreign flows: net selling continues

Foreign fund outflows remained a recurring theme across sessions. Provisional data cited from the NSE showed foreign investors were net sellers on Thursday, offloading equities worth Rs 3,255 crore.

With oil prices rising and geopolitics intensifying, the combination of FII selling and a weaker rupee added to the pressure on benchmarks and rate-sensitive sectors.

Why crude matters more for India in this phase

The oil move was framed as particularly negative for India because the country imports a large share of its crude requirements. One report put India’s dependence at nearly 80-85%.

Higher crude prices can lift inflationary pressures and affect growth and corporate earnings, which is why markets reacted strongly to sustained crude levels and the risk of disruption in global oil supplies.

Key numbers to track

Market impact: what changed during the selloff

The market reaction was driven by a mix of external shocks and domestic sensitivities. Rising crude prices increased concern around inflation and the current account, while currency weakness reinforced the same worry set.

At the index level, repeated breaks below key Nifty marks such as 23,650 and 23,300 were reported alongside heavy IT selling, which dragged benchmarks. Volatility moved higher as investors recalibrated risk in response to rapidly changing Middle East developments.

Analysis: why the story matters for investors

This phase highlights how quickly India’s markets can reprice when oil and geopolitics shift together. The coverage linked each leg of selling to a clear chain: US-Iran uncertainty and Strait of Hormuz tensions pushed crude higher, which pressured the rupee and raised concerns over inflation and external balances.

Foreign investor selling added a second layer of stress by tightening liquidity at a time when global risk appetite was already weak. With IT also seeing a sharp reversal, the downside broadened beyond energy sensitivity into heavyweight sectors.

Conclusion

Indian equities stayed under pressure across sessions as US-Iran tensions, higher crude, a weaker rupee, and continued foreign selling combined to push the Sensex and Nifty sharply lower. Markets are likely to remain headline-sensitive as investors track developments around the Strait of Hormuz, crude price moves, and foreign flow trends.