Oil Shock Jolts Markets: Sensex Tanks Over 900 Points as Brent Tops $120

The domestic stock markets opened under heavy selling pressure on Thursday as Brent crude oil futures surged above $120 per barrel, denting investor sentiment amid continued uncertainty in West Asia.

The Nifty 50 index opened at 23,899.20, falling 278.45 points or 1.15 per cent, while the BSE Sensex opened at 76,582.24, down 914.12 points or 1.18 per cent.

Market participants said the sharp rise in crude prices and lack of clarity on the geopolitical situation have led to heightened volatility and risk aversion.

Ajay Bagga, Banking and market expert, told ANI that domestic markets are facing significant pressure, with early indications such as GIFT Nifty pointing to a gap-down opening of over 140 points.

He noted that as a major oil importer, India is witnessing pressure on its currency and bond markets, with the rupee weakening to near Rs 95 per US dollar and bond yields rising.

Will Long Weekend and Expiry Day Trigger Sharper Moves in Indian Stock Markets?

"Today marks the monthly expiry for BSE contracts, which is expected to amplify the downward volatility triggered by the crude spike and FII outflows,” he said.

“The market is currently in a 'wait-and-watch' mode regarding whether the U.S. will move beyond a blockade to direct military action, which remains the primary tail-risk for the coming weeks,” he added.

“With a long weekend coming up expect sharp moves and paring of positions in Indian markets,” Bagga said.

The geopolitical situation has intensified as US President Donald Trump stated that the naval blockade of the Strait of Hormuz will continue until Iran agrees to a new nuclear and security deal.

The US has rejected Iran's proposal to reopen the Strait before negotiations, increasing fears of prolonged supply disruptions.

How Did Nifty Indices React to Rising Brent Crude Prices and Market Pressure?

Sectorally, all major indices on the NSE opened in the red, indicating broad-based selling.

Nifty Auto declined 1.84 per cent, Nifty FMCG fell 1.04 per cent, Nifty Metal dropped 1.25 per cent, Nifty Media slipped 0.96 per cent, and Nifty Private Bank declined 1.48 per cent.

Nifty IT was down 0.6 per cent, while PSU Bank stocks also saw pressure, falling 1.73 per cent.

In the commodities market, Brent crude futures surged to as high as $121 per barrel during early trade, a level not seen in the last four years.

July futures opened at around $111 per barrel. Meanwhile, WTI crude was also trading significantly higher, near $108 per barrel.

(With inputs from ANI)