Markets trade deeply in red amid escalation in middle-east conflict

Indian equity benchmarks made a gap-down opening on Monday, following the mixed cues from Wall Street on Friday as well as weakness in Asian counterparts, amid escalation in the middle-east conflict after the U.S. joined Israel in the weeks-long war with Iran, with US carrying out a ‘successful’ airstrike on three nuclear sites in Iran over the weekend. This has heightened fears of a broader regional conflict. Trade tensions also intensified after U.S. President Donald Trump said he is going to send letters to trading partners, fixing unilateral tariffs even ahead of the July 9 deadline he had already set for negotiations.

Sensex and Nifty are trading deeply in red in early deals led by selling in IT, Auto and TECK counters. Traders were concerned as Government data showed that net direct tax collection so far this fiscal year dropped 1.39 per cent to Rs 4.59 lakh crore, on slowdown in advance tax mop-up and higher refunds. Some cautiousness came as Government data showed that India’s eight core sectors’ growth slowed down to 0.7 per cent, lowest in nine months, in May 2025 against 6.9 per cent in the same month last year. Traders are looking ahead to the HSBC Flash India Purchasing Managers' Index data to be out later in the day.

The BSE Sensex is currently trading at 81575.90, down by 832.27 points or 1.01% after trading in a range of 81567.68 and 81984.44. There were 1 stock advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.49%, while Small cap index was down by 0.27%.

The top losing sectoral indices on the BSE were IT down by 1.39%, Auto down by 1.22%, TECK down by 1.12%, Power down by 1.07% and Consumer discretionary down by 0.84%, while there was no gainer on the BSE sectoral front.

The sole gainer on the Sensex was Bharat Electronics up by 1.32%. On the flip side, Infosys down by 2.36%, Mahindra & Mahindra down by 1.81%, Hindustan Unilever down by 1.79%, Power Grid down by 1.57% and TCS down by 1.48% were the top losers.

Meanwhile, CRISIL Ratings in its latest report has said that the ongoing conflict in the Middle East so far did not have any significant impact on global trade of Indian corporates. However, it added if the uncertainties aggravate, some sectors might feel the impact. The uncertainties have impacted global crude markets, with the Brent crude hovering in the range of $73 to $76 per barrel over the past one week. During April and May, the Brent crude was hovering around $65 per barrel.

According to the report, any escalation of the tensions could result in further spike in oil prices, and added that this will benefit upstream oil companies and margins for the downstream refiners will get squeezed. It said India’s direct trade with Israel and Iran, the two countries engaged in the conflict, is minuscule at less than one per cent of total trade. 

It highlighted that India’s major export to Iran is basmati rice, trade with Israel is more diversified. It further said any escalation of the uncertainties in the Middle East has the potential to disrupt energy supply chains.  It noted some of the other sectors which might feel the impact are speciality chemicals, paint, aviation and the tyre sectors.

The CNX Nifty is currently trading at 24857.05, down by 255.35 points or 1.02% after trading in a range of 24834.55 and 24988.10. There were 2 stocks advancing against 48 stocks declining on the index.

The only gainers on Nifty were Bharat Electronics up by 1.29% and Nestle up by 0.70%. On the flip side, Shriram Finance down by 2.43%, Infosys down by 2.37%, Hero MotoCorp down by 1.86%, Hindustan Unilever down by 1.81% and Mahindra & Mahindra down by 1.73% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted lost 303.56 points or 1.38% to 21,742.18, Nikkei 225 slipped 129.44 points or 0.34% to 38,273.79, Jakarta Composite dropped 96.63 points or 1.4% to 6,810.51, Hang Seng declined 28.43 points or 0.12% to 23,502.05, Straits Times fell 15.87 points or 0.41% to 3,867.56 and KOSPI was down by 12.82 points or 0.42% to 3,009.02, while Shanghai Composite was up by 5.17 points or 0.15% to 3,365.07.