The sell-off erased about ₹8.7 lakh crore from the aggregate market capitalisation of BSE-listed companies.
India’s Volatility Index – the stock market’s fear gauge – jumped 17.5% to 23.36, off the day’s high of 24.49, underscoring the heightened risk-off mood in the market that has prompted foreign fund managers to step up selling. The index has surged 92% over the past month, with the war between US-Israel and Iran contributing to existing concerns over the impact of AI-related disruptions on the software services sector.
For now, soaring oil prices seem to be the topmost concern.
“The sharp rise in oil prices has pushed investors into a risk-off mode, leading to higher volatility, sector rotation and intermittent bouts of selling,” said Shreyash Devalkar, head – equity at Axis Mutual Fund.
Agencies Some Losses Recouped
“For India, crude oil is the most critical variable because it directly impacts inflation expectations, the current account, the rupee and, eventually, interest rates,” said Devalkar of Axis MF. The NSE Nifty 50 dropped 422.4 points, or 1.7%, to close at 24,028.05-its lowest level since May last year-while the BSE Sensex declined 1,352.74 points, or 1.7%, to end at 77,566.16, its weakest close since April 2025. Both indices had fallen more than 3% during intraday trade.
The fall in crude prices from the highs helped the market cut a portion of the losses, said Sunny Agrawal, Head of Research at SBI Securities.
Brent crude May futures were trading near $104 a barrel on Monday evening, off the highs of $119 earlier in the day, after G7 countries tried to curb the run-up by announcing the release of emergency oil reserves. But this could be temporary if the conflict drags on for longer than expected. Foreign portfolio investors sold shares worth ‘6,346 crore on Monday, while domestic institutional investors were buyers to the tune of ‘9,014 crore. FIIs have sold shares worth ‘28,525 crore since the start of the conflict last Saturday.
“Elevated crude prices, a stronger US dollar and pressure on the rupee typically prompt FIIs to pare exposure to emerging markets, and India is no exception, given its high oil import dependence,” said Devalkar.
Among Asian markets, Japan’s benchmark plunged 5.2%, South Korea dropped 6%, Taiwan fell 4.4%, Hong Kong declined 1.4% and China slipped 0.7%. The pan-European Stoxx 600 index was down less than 1% at the time of going to print.
At home, the broader markets also came under selling pressure, with the Nifty Midcap 150 falling 2% and the Nifty Smallcap 250 declining 2.3%. Of the total 4,536 stocks traded on the BSE, 886 advanced while 3,484 declined on Monday. On the technical front, Nifty has strong support near 23,500 and resistance around 24,500.