Stock Market Plummet: Sensex Falls 1,600 Points, Nifty 50 Declines 2% Amid US-Iran Tensions and Rising Brent Crude Prices

Global Markets Plunge Amid Fears of Prolonged Middle East Conflict

The Indian equity indices, Sensex and Nifty 50, are likely to open on a weak note on Monday, following subdued global cues after U.S.-Iran ceasefire negotiations broke down. The U.S.-Iran talks held over the weekend in Islamabad failed to produce a breakthrough, casting doubt on the fragile two-week ceasefire.

The U.S. Central Command announced that American forces would begin enforcing a blockade on all maritime traffic entering and exiting Iranian ports from 10 a.m. ET (1400 GMT) on Monday. In response, the Indian stock market has opened on a weak note. The Sensex opened 1,613 points or 2% lower at 75,937.16, while the Nifty started the day 461 points or 1.9% lower at 23,589.60.

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The blockade has intensified tensions with Iran following the collapse of peace negotiations. As a result, oil prices surged, with Brent crude rallying 6.8% to trade just below $102 per barrel. The escalation has also led to a strengthening of the dollar against all its Group-of-10 counterparts, extending its safe-haven appeal.

Asian equities weakened, with regional shares slipping 0.7%. Meanwhile, S&P 500 futures trimmed earlier losses but remained down 0.7%, as rising oil prices stoked fears of a drag on global economic growth. U.S. Treasuries declined, while Japan's 10-year bond yield climbed to 2.49%—its highest level since 1997—on mounting inflation concerns.

Gold fell 0.7% to around $4,710 per ounce, as elevated oil prices reinforced expectations that interest rates could remain higher for longer, pressuring non-yielding assets. The escalation has dampened investor appetite to build on last week's ceasefire-led rally in equities, leading to a more cautious tone across global markets.

However, the relatively moderate decline in stocks at the start of Monday's session suggests investors are still holding onto cautious optimism that a resolution could emerge and limit the broader fallout of the conflict. As of 10:34 a.m. Tokyo time, S&P 500 futures were down 0.7%. Japan's Topix slipped 0.2%, Australia's S&P/ASX 200 declined 0.4%, Hong Kong's Hang Seng dropped 1.1%, the Shanghai Composite edged 0.3% lower, and Euro Stoxx 50 futures fell 1.2%.

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