Indian equity markets endured one of their most turbulent weeks in recent years, with benchmark indices logging their steepest weekly losses in years as escalating geopolitical tensions in West Asia triggered a global risk-off wave and sent crude oil prices soaring.
The week began with a dramatic
sell-off on Monday after fears of a prolonged conflict involving the United States, Israel and Iran rattled global financial markets. By Friday’s close, both the BSE Sensex and the Nifty 50 had
suffered heavy losses, reflecting sustained selling across banking, auto, metal and infrastructure stocks.
The Sensex ended the week at 74,563.92, down 1,470.50 points (1.93 per cent) on Friday alone, while the Nifty 50 settled at 23,151.10, falling 488.05 points (2.06 per cent). For the week, the Nifty plunged 5.3 per cent, marking its biggest weekly fall since June 2022, while the Sensex dropped about 5.5 per cent, its worst weekly decline since May 2020.
Oil shock sparks global market turmoil
The week’s turmoil was triggered by a sudden surge in global oil prices after the conflict in West Asia widened, raising fears of supply disruptions through the strategically crucial Strait of Hormuz.
At one point on Monday, Brent crude surged nearly 20 per cent to above $111 per barrel, while US benchmark WTI jumped more than 22 per cent, the sharpest spike since 2022. The rally was fuelled by production cuts and disruptions to shipments from key oil producers in the region.
The spike in energy prices rattled global markets, with Asian equities suffering sharp losses. Japan’s Nikkei 225 plunged about 7 per cent, while South Korea’s Kospi tumbled nearly 8 per cent, amplifying selling pressure across emerging markets including India.
For an energy-importing economy such as India, higher crude prices raise concerns about inflation, fiscal pressures and currency stability — factors that often weigh heavily on equity valuations.
Monday crash sets the tone
Dalal Street opened the week with a dramatic slide. The Sensex plunged more than 2,300 points in early trade on Monday, while the Nifty slipped below 23,800, as investors rushed to cut risk exposure.
Banking and financial stocks led the rout. Shares of State Bank of India, ICICI Bank, Axis Bank and HDFC Bank fell sharply, dragging the broader market lower.
Infrastructure major Larsen & Toubro and metal giant Tata Steel also came under heavy selling pressure, reflecting investor concerns about global growth and commodity demand.
Aviation stocks were among the worst hit as rising fuel costs threatened profitability. Shares of InterGlobe Aviation, which operates IndiGo, plunged more than 6 per cent during the session.
The markets eventually recovered slightly but still closed sharply lower on Monday, with the Sensex ending down more than 1,350 points and the Nifty slipping below 24,100.
Brief relief rally on Tuesday
Markets staged a temporary rebound on Tuesday after crude prices retreated following signals of possible diplomatic efforts to de-escalate the conflict.
The Sensex surged nearly 640 points to close at 78,205.98, while the Nifty climbed above 24,260, led by gains in banking, auto and metal stocks.
Auto majors Mahindra & Mahindra and Maruti Suzuki, along with lenders ICICI Bank and Axis Bank, were among the biggest contributors to the rally. Aviation stocks also rebounded sharply as oil prices dropped more than 6 per cent during the session.
However, the relief proved short-lived as geopolitical uncertainty continued to dominate investor sentiment through the rest of the week.
Selling pressure returns
By Friday, the market slump intensified again as global uncertainty, foreign fund outflows and currency weakness combined to trigger a broad-based sell-off.
Heavyweight banking stocks once again led the decline. Infrastructure and metal companies also saw sharp losses, with Larsen & Toubro falling more than 7 per cent and Tata Steel dropping over 5 per cent during the session.
Auto stocks such as Maruti Suzuki and Mahindra & Mahindra declined more than 3 per cent, while IT majors including Infosys, Tata Consultancy Services and HCLTech ended lower.
Defensive stocks offered limited support. Hindustan Unilever and Bharti Airtel were among the few gainers, helping prevent an even steeper fall in the benchmarks.
Volatility surges as fear gauge spikes
Market volatility surged sharply during the week. India VIX, often referred to as the market’s fear gauge, climbed nearly 14 per cent to 22.64, its highest closing level since May 2024, signalling heightened risk perception among investors.
The broader market also remained under pressure, with midcap and smallcap stocks posting declines alongside the benchmark indices.
Technical indicators turn bearish
The steep sell-off has significantly weakened the market’s technical outlook.
The Nifty closed the week near its lowest level since April 2025, slipping below key long-term averages including the 100-week EMA and 20-month EMA, signals that analysts often interpret as indicators of strong bearish momentum.
Technical indicators have also deteriorated sharply. The Relative Strength Index (RSI) has fallen into oversold territory, suggesting the possibility of a short-term bounce, though analysts warn that the broader trend remains negative.
Market experts say the immediate support for Nifty lies around 23,000–22,900, with 22,700 emerging as a critical level. On the upside, 23,500–23,800 could act as the first resistance zone.
Outlook for next week
Despite the steep correction, analysts caution that a durable market recovery may depend largely on geopolitical developments and oil price stability.
If crude prices remain elevated due to prolonged tensions in West Asia, inflation risks could intensify, potentially prompting tighter monetary conditions globally and further pressure on equities.
In the near term, markets may witness a technical pullback from oversold levels, but unless the Nifty decisively moves above 24,300, the broader downtrend is likely to remain intact.
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