Indian markets were hit by a wave of panic selling on Monday as the escalating war in the Middle East roiled global risk sentiment, pushed up crude prices and triggered a sharp fall in aviation and travel stocks.
Investors worried that a prolonged conflict and disruption of oil supplies could upset India’s hard-won mix of strong growth and contained inflation.
Sensex, Nifty slide after gap-down open
The 30-share BSE Sensex crashed as much as 2,743 points, or 3.37 per cent, to 78,543.73 in early trade, while the NSE Nifty 50 tumbled 533.55 points, or 2.11 per cent, to 24,645.10. By around 11 am, both indices had pared some losses but were still down about 1.3 per cent.
Selling was broad-based: 15 of the 16 major sectoral indices were in the red, and small- and mid-cap indices were lower by about 1 per cent each.
InterGlobe Aviation (IndiGo), Larsen & Toubro, Eternal, Adani Ports, Asian Paints, UltraTech Cement and Reliance Industries were among the biggest laggards on the Sensex, while defence PSU Bharat Electronics stood out as the consistent early gainer.
Foreign institutional investors dumped Rs 7,536 crore worth of equities on Friday, even as domestic institutions bought Rs 12,292 crore.
Oil shock and aviation pain
The trigger has been a dramatic escalation in the Middle East. Iran’s Supreme Leader Ayatollah Ali Khamenei was killed in a coordinated US–Israeli airstrike on Tehran, confirmed by Iranian state media, and Iran has fired missiles at Israel and several Arab countries in retaliation.
Tehran also closed navigation in the Strait of Hormuz, a key chokepoint that carries nearly 20 per cent of global oil flows and more than 40 per cent of India’s crude imports.
Brent crude initially spiked to about $82.40 a barrel, a 14‑month high, before easing to around $76.79—still roughly 6 per cent higher intraday.
Aviation, tourism stock performance
Aviation and tourism shares bore the brunt. InterGlobe Aviation fell about 7.5 per cent and SpiceJet 7.27 per cent, while Yatra Online, Easy Trip Planners, TBO Tek and Thomas Cook slumped between 5 per cent and 11 per cent as multiple Middle East airspace closures disrupted flights and raised cost fears.
The Indian Association of Tour Operators stated that they noted a surge in cancellations and rescheduling on routes to Europe via Gulf hubs, even as agents scramble to arrange rebookings and refunds.
Oil marketing companies, paint and tyre makers, airlines and chemical stocks also declined on concerns over higher input and fuel costs.
In contrast, upstream oil producers ONGC and Oil India gained around 0.5 per cent as higher crude prices support their realisations.
Why it matters for India
Analysts warned the shock might go beyond short-term market turbulence, hinting at the energy risk due to the surge in crude.
India is deeply tied to the region, with the Middle East accounting for 17 per cent of India’s exports, 55 per cent of its crude supplies and 38 per cent of inward remittances, according to Jefferies.
With the rupee weakening and bond yields edging up as investors shift to safe havens, markets will closely track how long the conflict drags on—and how much of the oil and logistics shock India can absorb before it spills into growth and prices.
