Indian equity benchmarks made gap-down opening on Monday tracking sell-off in the Asian peers after crude oil futures prices jumped over $100 per barrel in early Asian session as the ongoing US-Iran conflict escalated over the weekend, fueling supply disruption fears. Israel intensified air strikes on Iran, while the U.S. said its attacks on Iran are going to surge dramatically. Sensex and Nifty are trading under pressure with cut of over 2.75% in early deals amid outflows by foreign portfolio investors, who were net sales of equities worth Rs 6,030.38 crore on Friday. Traders were concerned as a finance ministry report cautioned that prolonged crisis in the Middle East can have adverse implications on the exchange rate and may stoke inflationary pressures on account of rising prices of petroleum goods and fertilisers. Meanwhile, the rupee dropped against the US dollar, as global crude oil prices shot up and the greenback strengthened amid the worsening situation in the Middle East.
The BSE Sensex is currently trading at 76678.98, down by 2239.92 points or 2.84% after trading in a range of 76424.55 and 77333.85. There were 1 stock advancing against 29 stocks declining on the index.
The top losing sectoral indices on the BSE were Bankex down by 4.23%, PSU down by 3.90%, Auto down by 3.80%, Industrials down by 3.51% and Consumer Discretionary down by 3.35%.
The sole gainer on the Sensex was Reliance Industries up by 0.34%. On the flip side, Interglobe Aviation down by 7.52%, SBI down by 5.99%, Maruti Suzuki down by 4.86%, Asian Paints down by 4.79% and Tata Steel down by 4.51% were the top losers.
Meanwhile, in a cautious tone, the Finance Ministry, in its latest report Monthly Economic Review for February, has said that rising prices of petroleum products and fertilizers due to the prolonged crisis in the Middle East may stoke inflationary pressures on India and may have adverse implications for the exchange rate. Besides, subdued capital flows, accentuated by a flight to safety, could put pressure on the currency. It also said that some sectors dependent on LNG and crude, like fertilisers and petrochemicals, could be affected if the crisis is prolonged. It added that this conflict has already driven Brent crude up around 9 per cent to near $80/bbl and LNG prices around 50 per cent.
Despite the country’s high import dependency on crude oil, it said the country has sufficient foreign exchange reserves, a low CAD (which stands at 0.8 per cent of GDP in H1 FY26), and low inflation rates, which collectively allow it to effectively mitigate the impacts of rising global crude oil prices and ensure domestic energy security. However, if the crisis persists, it could have material implications for the exchange rate and the current account deficit and could stoke inflationary pressures.
However, the report highlighted that Indian economy has maintained strong momentum in FY26, with real GDP growth estimated at 7.6 per cent and real GVA growth at 7.7 per cent. Economic activity in January 2026 remained broad-based, supported by strong high-frequency indicators, including robust logistics activity, expanding PMI indices and sustained demand conditions, pointing to continued growth momentum. The external sector is stable despite elevated global trade uncertainty.
Moreover, it said India’s active trade diplomacy, including progress on the India-EU FTA, the India-US Interim Trade Arrangement and the India-Oman CEPA, together with Budget initiatives aimed at improving trade facilitation, logistics efficiency and export competitiveness, is expected to diversify export destinations and strengthen external resilience over the medium term. It noted that external developments, including global growth conditions, trade dynamics, commodity price movements and geopolitical factors, will continue to shape the outlook. Nevertheless, it said strong macroeconomic fundamentals and continued reform momentum position the economy well for expansion.
The CNX Nifty is currently trading at 23773.90, down by 676.55 points or 2.77% after trading in a range of 23697.80 and 23959.70. There were 2 stocks advancing against 48 stocks declining on the index.
The only gainers on Nifty were Coal India up by 0.77% and Reliance Industries up by 0.48%. On the flip side, Interglobe Aviation down by 7.50%, SBI down by 5.85%, Shriram Finance down by 5.26%, Maruti Suzuki down by 4.99% and Tata Motors Passenger Vehicles down by 4.79% were the top losers.
All Asian markets were trading lower; Nikkei 225 plunged 3725.84 points or 6.7% to 51,895.00, Taiwan Weighted slipped 1738.83 points or 5.18% to 31,860.71, Hang Seng declined 681.29 points or 2.72% to 25,076.00, KOSPI dropped 436.46 points or 7.82% to 5,148.41, Jakarta Composite lost 277.75 points or 3.66% to 7,307.94, Straits Times weakened 130.24 points or 2.69% to 4,718.01 and Shanghai Composite was down by 46.51 points or 1.13% to 4,077.68.
