Sensex Falls 223 Points, Nifty Slips Below 24,100 As Iran Tensions Push Oil Above $90

Indian equity benchmarks opened lower on Monday, tracking weak global cues as renewed tensions between the US and Iran pushed crude oil prices higher and raised concerns over inflation and interest rates.

At 9:30 am, the Sensex was down 222.8 points, or 0.29%, at 77,041, while the Nifty 50 declined 112.45 points, or 0.47%, to 24,063.20.

At the open, the Sensex had fallen around 190 points, while the Nifty was down about 105 points.

US-Iran Tensions Push Crude Higher

Global sentiment weakened after US forces struck two Iranian launchers, marking the first known American strikes on Iran since late July.

Brent crude futures jumped around 2.5% to $90 per barrel, while Asian markets declined around 0.7%.

The rise in crude prices is a key concern for India as higher energy costs could add to inflationary pressures and affect the rupee and corporate margins.

HDFC Bank is likely to remain in focus after India's largest private-sector lender said on Saturday that Chief Executive Sashidhar Jagdishan will not seek reappointment when his term ends in October.

The stock could see heightened volatility as investors assess potential candidates and the implications of the leadership transition.

Japan Stocks Slide On Rate-Hike Bets

Global markets were also pressured by expectations of tighter monetary policy.

Japan's Nikkei 225 fell 1.97% to 65,096.63 in early trading, while the broader Topix declined 0.84% to 4,111.71.

Markets have priced in a near certainty that the Bank of Japan will raise rates at its meeting next month. Japanese government bond yields also rose to fresh multi-decade highs on Monday, according to Reuters.

Meanwhile, Wall Street's main indexes ended lower last week after Federal Reserve Chair Kevin Warsh reiterated the central bank's focus on fighting inflation, increasing expectations of a possible interest-rate hike.

Broader Market May Remain Active

V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the market faces several headwinds at the start of the week, including renewed US-Iran tensions and concerns over the US interest-rate outlook.

He said the market has interpreted Warsh's comments on persistent inflation as an indication of a possible rate hike at the September 15-16 FOMC meeting, with the resulting rise in bond yields weighing on equities.

“Another headwind is the renewed escalation of tensions between the U.S. and Iran pushing the Brent crude above $90,” Vijayakumar said.

He added that HDFC Bank will be a key focus for investors and could turn highly volatile amid speculation surrounding Jagdishan's successor.

Despite potential pressure on the Nifty, Vijayakumar expects significant activity in the broader market, which has attracted strong buying in recent weeks.

“A significant recent trend in the market is that the market is giving more preference to growth than value,” he said.