Indian equity benchmarks ended a volatile week deep in the red, with the BSE Sensex and Nifty 50 falling nearly 3 per cent each as escalating geopolitical tensions in West Asia, a surge in oil prices, and persistent selling in banking stocks rattled investor sentiment.
The turbulence on Dalal Street came amid a rapidly intensifying conflict involving the United States, Israel and Iran, which triggered global risk-off sentiment and heightened concerns over energy supply disruptions through the Strait of Hormuz — a critical chokepoint for global oil flows.
By the end of Friday’s session, the 30-share Sensex had dropped to 78,918.90, down 1,097 points or 1.37 per cent for the day, while the broader Nifty 50 settled at 24,450.45, losing 315.45 points or 1.27 per cent. Over the course of the week, both benchmark indices declined roughly 3 per cent, reflecting sustained volatility across sectors.
Week begins with geopolitical shock
Markets opened the week on a sharply negative note on Monday after coordinated US–Israeli airstrikes reportedly killed Iran’s Supreme Leader Ayatollah Ali Khamenei, dramatically escalating tensions in West Asia.
At the opening bell on Monday, the Sensex plunged over 1,000 points, briefly touching 78,543.73, while the Nifty slipped below 24,900 amid broad-based selling across sectors. The session ended with the Sensex closing 1,048.34 points lower at 80,238.85, while the Nifty settled at 24,865.70, down 312.95 points.
The selloff was led by capital goods, financials and auto stocks. Engineering major Larsen & Toubro fell over 5 per cent, while aviation firm InterGlobe Aviation slid nearly 6 per cent. Banking heavyweights including Axis Bank, State Bank of India and Kotak Mahindra Bank also declined.
Information technology stocks such as Infosys, TCS and HCLTech ended lower as investors trimmed exposure to risk assets amid global uncertainty.
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Midweek panic as global risk-off deepens
Selling pressure intensified midweek, with benchmarks opening sharply lower on Wednesday as global markets reacted to fears of further escalation in the conflict.
The Sensex plunged 1,649.78 points, or 2.06 per cent, at the opening bell to 78,589.07, while the Nifty dropped 465.45 points to 24,400.25, briefly hitting an intraday low of 24,358.65.
Financial stocks bore the brunt of the decline. HDFC Bank fell nearly 4 per cent, while ICICI Bank and Axis Bank dropped up to 3.6 per cent. Infrastructure giant Larsen & Toubro slid more than 6 per cent, amplifying pressure on the benchmarks.
The market reaction was also driven by sharp moves in energy markets. Oil prices surged nearly 4.7 per cent, while European gas prices spiked over 20 per cent after Qatar temporarily halted LNG production, raising fears of global supply disruptions.
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Relief rally on Thursday
After two sessions of heavy losses, Dalal Street staged a strong rebound on Thursday as investors selectively bought beaten-down cyclical stocks.
The Sensex jumped 899.71 points, or 1.14 per cent, to close at 80,015.90, reclaiming the psychologically important 80,000 mark. The Nifty rose 256.85 points, or 1.05 per cent, to settle at 24,737.35.
The rally was led by metals, infrastructure and energy stocks. Adani Ports gained nearly 4 per cent, while Hindalco surged around 3.8 per cent. Larsen & Toubro climbed more than 3.7 per cent, and energy heavyweight Reliance Industries advanced over 3 per cent.
However, the recovery remained fragile as IT and banking stocks lagged the broader market.
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Banking stocks trigger Friday slump
The optimism proved short-lived. Markets reversed sharply on Friday as banking and financial stocks led another round of selling.
The Sensex plunged more than 1,000 points to close at 78,918.90, while the Nifty slipped below 24,500 to settle at 24,450.45.
ICICI Bank emerged as the worst performer, falling more than 3 per cent, while State Bank of India, Axis Bank and HDFC Bank declined between 2 and 2.7 per cent. Financial services firms Bajaj Finance and Bajaj Finserv also ended lower.
Industrial and infrastructure stocks including Larsen & Toubro and UltraTech Cement dropped over 2 per cent, while Maruti Suzuki and Bharti Airtel closed in the red.
Only a handful of defensive names managed gains. Bharat Electronics rose more than 2 per cent, while Reliance Industries, NTPC, Sun Pharma and Infosys ended modestly higher.
Oil shock and policy moves shape sentiment
The geopolitical crisis in West Asia remained the dominant driver of market sentiment throughout the week.
Iran has launched retaliatory strikes on Israeli and US-linked targets following the reported killing of its Supreme Leader, while also threatening shipping in the Strait of Hormuz — through which roughly 40 per cent of India’s crude oil imports pass.
The turmoil pushed Brent crude prices close to $85 per barrel, while US benchmark WTI crude spiked more than 8.5 per cent, marking its biggest single-day jump since 2020.
Adding another geopolitical dimension, Washington granted India a 30-day waiver to continue purchasing Russian oil, easing immediate concerns about energy supply disruptions amid the Iran conflict.
India consumes around 5.5 million barrels of oil per day and imports nearly 90 per cent of its crude requirements, making it highly sensitive to disruptions in global energy markets.
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Volatility likely to persist
Market participants expect volatility to remain elevated in the near term as investors track developments in West Asia, crude oil prices and global capital flows.
Foreign institutional investors have turned cautious amid geopolitical uncertainty, while domestic investors continue to provide some support to the market.
Analysts say that unless tensions ease in the Gulf region and energy markets stabilise, Dalal Street could remain vulnerable to sharp swings in the weeks ahead.
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