The Sensex gained over 342 points to open at 74,384, while the Nifty 50 fell 34 points to start the session at 23,116. This comes after the benchmark indices crashed around 8% last week, pushing the Sensex below 75,000 and the Nifty below 23,200 for the first time since April 2025.
Bharat Electronics, Mahindra & Mahindra, ICICI Bank and Asian Paints were among the top losers on Sensex, falling up to 1%. UltraTech Cement, ITC, Trent, Tata Steel and Hindustan Unilever were among the top gainers.
Nifty Oil & Gas was the top sectoral loser on NSE, falling nearly 1%. Nifty Metal meanwhile led gains, rising 0.5%. 1,633 stocks declined, while 757 stocks advanced and 118 remain unchanged on NSE.
Iran-Israel war continues to escalate
Despite bleak assurances by the US President, the war in the Middle East continued to escalate over the weekend. Trump threatened more strikes on Iran’s main oil export hub Kharg Island over the weekend and said he was not ready to reach a deal to end the war which has shut off the vital Strait of Hormuz.
US President Donald Trump said on Sunday that his administration is in talks with seven countries to help secure the Strait of Hormuz amid the hostilities, calling on them to help protect ships in the vital waterway that Tehran has mostly blocked to oil tanker traffic.
“I’m demanding that these countries come in and protect their own territory because it is their territory,” Trump told reporters aboard Air Force One on the way from Florida to Washington. “It’s the place from which they get their energy.”
Trump also said Washington is in contact with Iran but expressed doubt that Tehran is prepared for serious negotiations to end the conflict. Iranian Foreign Minister Abbas Araqchi meanwhile said that the country is ready to defend itself for as long as it takes.
Crude impact
Oil prices continue to hold above the key psychological mark of $100 per barrel as any diplomatic resolution to the raging war between Iran and Israel-US still remains elusive, leading to expectations of prolonged closure of the Strait of Hormuz.
Oil prices soared to multi-month highs since the outbreak of the war earlier this month after US and Israel’s military strikes on Iran killed its former supreme leader Ayatollah Khamenei, followed by massive retaliation from Tehran.
The Strait of Hormuz, which remains a critical chokepoint for trade, effectively remains shut for traffic as Iran attacks any ship trying to pass through, leading to the rally in oil prices. The narrow 33 kilometre long waterway connects the Persian Gulf and the Gulf of Oman, and carries over 20% of the world’s oil and gas shipments.
Brent crude futures gained more than 1% to trade at $104.5 per barrel, while WTI Crude rose over 0.4% to $99.11 per barrel, as seen at 8.25 am. The sharp surge comes despite bleak assurances by the US administration.
US President Donald Trump-led administration plans to announce that several countries have agreed to form a coalition to escort ships through the Strait of Hormuz, Wall Street Journal reported. Trump meanwhile told Financial Times that it would be very bad for the future of NATO if the allies did not help.
Global crude oil prices could rise to $120 per barrel in the short term and potentially reach $150 per barrel if war extends over a month and geopolitical tensions continue in West Asia, said Kayanat Chainwala, Assistant Vice President at Kotak Securities.
Rupee
Indian rupee opened at 92.43 against the US dollar, nearly unchanged from its previous close of 92.4550. However the Indian currency continued to remain above the $92-level.
Rupee has seen a notable decline against the US dollar, as the safe-haven appeal of the American greenback shines amid geopolitical tensions. The Indian currency hit all time lows last week, amid the rising hostilities. Oil movements remain a key driver for the rupee, which tends to widen India’s import bill and weigh on the currency, said Jateen Trivedi, VP Research Analyst of Commodity and Currency at LKP Securities said.
FII sell Indian equities worth Rs 68 lakh crore in 11 days
FII extended their selling streak for the 11th consecutive session on Friday, net selling Indian equities worth around Rs 68 lakh crore during the period. Foreign investors net sold Indian equities worth Rs 10,717 crore on Friday.
While this doesn’t reflect their trading behaviour today, persistent selling by foreign investors seen for the past several sessions dampens investor sentiment.
Global markets
Global markets remained volatile, with Japan’s Nikkei falling more than 1% and China’s Shanghai Composite and South Korea’s Kospi declining 0.9% and 0.3% respectively. Hong Kong’s Hang Seng however hovered in the green with marginal gains.
European markets closed in the red on Friday, with France’s CAC falling more than 0.9%, Germany’s DAX declining 0.6% and UK’s FTSE falling 0.43%.
Wall Street also extended their decline on Friday, with Nasdaq declining over 0.9% and S&P 500 falling 0.6%.
Bond yield
US government bond yields remained volatile after the release of slower, downwardly revised fourth-quarter gross domestic product growth numbers for the country. The two-year note yield fell 3.5 bps to 3.727% after hitting its highest level since August 22 on Thursday. U.S. 10-year notes rose up to 4.281%
What lies ahead?
Market volatility is expected to persist in the near term as geopolitical tensions in West Asia continue to disrupt the energy sector and push crude oil prices higher, while uncertainty around shipping routes through the Strait of Hormuz keeps risk sentiment fragile, said Siddhartha Khemka – Head of Research, Wealth Management, Motilal Oswal Financial Services. He added that any meaningful de-escalation in the conflict involving Iran, Israel and the US could provide relief and support a recovery in equities, while further escalation may keep markets under pressure.
“Going ahead, market direction is likely to remain sensitive to developments in the West Asia conflict, movements in crude oil prices and the trend in foreign fund flows. Sustained foreign outflows and elevated oil prices could keep sentiment cautious, while any signs of easing geopolitical tensions may provide relief to markets,” Khemka said.
Looking forward, market direction is likely to remain dominated by the Israel and US conflict with Iran and crude trends, given their knock-on effects on inflation, corporate margins, the current account, and RBI policy space, according to Vinod Nair, Head of Research, Geojit Investments.
“With buying support from domestic institutions and retail investors turning cautious, a sustained recovery will likely require clear signs of geopolitical de‑escalation, stabilisation in crude, and improved clarity on LPG availability and sector‑specific demand,” the analyst added.
Technical view
Nifty 50 on weekly chart has formed a sizable bearish candle with a lower high and a lower low, signaling continuation of the corrective decline, according to Bajaj Broking. It added that the index in the process slipped to 11 months low and breached 100 weeks EMA and rising trendline joining the lows of CY23 and CY25.
“Index trends remain down as it continues to form lower high and lower low in the short-and medium-term time frame. With key support on the downside to watch out for is placed around 22,700-22,400. The sharp decline has pushed daily oscillators into oversold territory, with the 14-period RSI below 30. A short-term pullback is possible, but there are no clear reversal signals yet. The index needs to start forming higher highs and higher lows on a sustained basis and close above last week’s high 24,303 to signal a pause or reversal in the downtrend,” it added.