Indian stock market opened lower on Monday, tracking a sharp selloff across Asian markets amid renewed tensions in the Middle East and a spike in crude oil prices. Fears of an interest rate hike in the US also weighed on global investors’ risk appetite.
The BSE Sensex opened 821.73 points, or 1.11%, lower at 73,421.61, while the NSE Nifty 50 opened at 23,080.70, down by 286.00 points, or 1.22%. The Bank Nifty index opened 642.80 points, or 1.18%, lower at 53,853.45.
Selling was broad-based, as the Nifty Smallcap 100 and the Nifty Midcap 100 indices declined over 1% each.
Among sectors, Nifty IT, Nifty Metals, Nifty Auto and Nifty Realty slumped over 1.5% each, while Nifty Media and Nifty Pharma witnessed gains.
“There are strong headwinds for the market as trading begins for the week. The sharp cut of 4.18% in Nasdaq last Friday has rattled global markets with tech dominated South Korea and Taiwan facing a big sell-off. The escalation of conflict in West Asia, with Iran firing missiles at Israel in retaliation to Israel’s aggression in Lebanon, has hardened crude prices,” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
He noted that the strong US jobs data would not lead the US Federal Reserve to cut rates as President Donald Trump wants, and hence the rates are likely to be on hold for some time.
Here are 5 key reasons behind the Indian stock market crash today:
1. Global Markets Tumble
Asian markets tumbled, and the broader MSCI Asia ex-Japan index slipped 2.7%.
Japan’s Nikkei declined 3.8%, led by a fall in AI-linked stocks, while South Korea’s Kospi was down 4.8%, recovering from an 8% fall earlier. Hong Kong’s Hang Seng Index slid nearly 2%, while mainland China’s CSI 300 declined 1.5%.
The fall in Asian markets followed a drop in US stock futures as Dow Jones Average futures lost 151 points, or 0.3%.
The US stock market ended lower on Friday, with the tech-heavy Nasdaq posting its largest one-day percentage loss since April 2025. The Dow Jones Industrial Average declined 695.15 points, or 1.35%, to 50,866.78, while the S&P 500 slipped 200.57 points, or 2.64%, to 7,383.74. The Nasdaq Composite closed 1,121.53 points, or 4.18%, lower at 25,709.43.
2. US-Iran War
The war in the Middle East escalated after Israel struck military targets in western and central Iran on Monday. A day ago, Israel had also launched strikes in the Beirut area for the first time since the US announced a truce plan for Lebanon last week.
In retaliation, Iran fired a salvo of missiles at Israeli targets, putting US-Iran peace talks at risk. However, US President Donald Trump insisted that an agreement to end the wider war remained well within reach.
3. Crude Oil Prices
Crude oil prices jumped after Israel’s launch of renewed strikes on Lebanon and sounds of explosions heard in Iran. The flaring conflict eroded hopes for an imminent end to the wider war and a restart to crude flows through the Strait of Hormuz.
Brent crude futures rallied 3.39% to $96.24 a barrel, while US crude futures were up 3.17% at $93.41 per barrel. Crude oil prices have risen over 50% since March.
India, being a major importer of crude oil to meet its energy requirements, remains vulnerable to rising oil prices, which adversely impact the economy through a higher import bill, deterioration in the balance of payments, and depreciation pressure on the rupee.
4. US Fed Rate Hike Fears
Global markets came under selling pressure after a stronger-than-expected May jobs report in the US lifted expectations for a Federal Reserve rate hike by end-2026.
US Nonfarm payrolls increased by 172,000 jobs last month after rising by an upwardly revised 179,000 in April. Economists polled by Reuters had forecast payrolls would increase by 85,000 jobs after a previously reported rise of 115,000 in April.
The probability of a Fed rate increase by December 2026 rose to 72.3% from 45.2% a week earlier, according to CME FedWatch.
Higher US rates typically reduce the appeal of emerging markets such as India.
5. Technical
Nifty 50 index continues to trade below all key moving averages and maintains a lower high–lower low structure, reflecting a weak technical setup. The crucial support zone is placed around 23,100 – 23,000, which coincides with the 61.8 percent Fibonacci retracement level of the April rally.
“A decisive break below this zone may accelerate selling pressure toward 22,700. On the upside, 23,500 remains the immediate hurdle, followed by a stronger resistance zone near 23,700,” said Aakash Shah, Technical Research Analyst at Choice Equity Broking.
Rajesh Palviya, Head of Research, Axis Direct noted that the near-term bias remains cautious as long as the Nifty 50 trades below the 23,500 – 23,550 resistance zone.
“Immediate support is placed around 23,100, and a sustained breach below this level could trigger further weakness towards the 23,000 – 22,800 zone,” said Palviya.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
