Indian Markets Plunge: Sensex Falls 650 Points as Nifty Drops Below 23,200 Amid Crude Price Concerns

Equity Indices Decline Sharply Amid Geopolitical Tensions, Rising Crude Oil Prices

The benchmark equity indices Sensex and Nifty declined sharply on Monday, June 6, amid escalating tensions in West Asia, rising crude oil prices, weak global cues, and continued foreign fund outflows.

At around 10:20 am, the Sensex was trading 598.21 points or 0.81 percent lower at 73,645.13. The broader Nifty fell 186.20 points or 0.8 percent to 23,180.50. Most sectoral indices traded in the red, with the exception of the pharma index. High-weightage financial and IT stocks fell 0.9 percent and 1.7 percent, respectively. The Nifty Smallcap 100 and Nifty Midcap 100 indices declined about 1 percent each.

One of the main contributing factors to the decline was the rising crude oil prices. Brent crude, the global oil benchmark, rose as much as 4.5 percent to USD 97.16 per barrel after Iran launched missiles at Israel following Israeli strikes on Beirut. This development dampened hopes of an end to the wider conflict and fueled concerns over continued disruptions to oil supplies.

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The geopolitical concerns also played a significant role in the decline of the equity indices. US President Donald Trump has urged Israeli Prime Minister Benjamin Netanyahu not to retaliate against Iran's latest missile attack, saying such a move could jeopardize ongoing negotiations aimed at ending the conflict that has lasted for more than three months.

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Another factor contributing to the decline was the weak global cues. Asian markets witnessed broad-based selling pressure. South Korea's Kospi, Japan's Nikkei 225, Shanghai's SSE Composite, and Hong Kong's Hang Seng traded significantly lower. US markets had ended sharply lower on Friday. The Nasdaq Composite plunged 4.18 percent, while the S&P 500 declined 2.64 percent and the Dow Jones Industrial Average fell 1.35 percent.

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The persistent FII selling also contributed to the decline. Foreign Institutional Investors (FIIs) sold equities worth Rs 8,776.25 crore on Friday. Foreign investors pulled out nearly Rs 43,000 crore from Indian equities during the first week of June amid a shift in global capital towards technology and artificial intelligence-linked opportunities overseas and continued weakness in the rupee.

Total outflows by Foreign Portfolio Investors (FPIs) from Indian equities have reached Rs 2.67 lakh crore so far in 2026, exceeding the Rs 1.66 lakh crore withdrawn during the whole of 2025.

The rupee also declined 17 paise to 95.35 against the US dollar, pressured by a stronger American currency overseas, firm US economic data, and geopolitical uncertainty. Forex traders said higher Brent crude prices hurt investor sentiment. Oil prices surged after Iran launched multiple rounds of missiles towards Israel, raising concerns over regional stability and the durability of ceasefire efforts.

Investor sentiment was also affected by growing expectations of a US interest rate hike following a stronger-than-expected jobs report for May. "On the macro front, the May CPI print on June 10 is the key scheduled release, with a hot reading likely to cement the case for a rate hike at the June 16-17 FOMC," Kaynat Chainwala, AVP Commodity Research, Kotak Securities, said.

Anand James, Chief Market Strategist at Geojit Investments, said, "After turning lower from the upper extremity of the 23126-23500 range pencilled in on Friday, Nifty is poised to see the lower extremity today. With momentum favoring bears, we are likely to see a breakage of the same, but favored view expects buying interest to surface if 22900-22800 is seen."