Markets Turn Volatile: Nifty, Sensex Fall Amid Oil Surge, West Asia Tensions

Indian equity benchmark indices traded in a volatile range on Monday, reversing early losses but failing to sustain gains as escalating geopolitical tensions in West Asia and a sharp spike in crude oil prices weighed on investor sentiment.

The NSE Nifty 50 slipped as much as 0.46% to 24,241 in early trade before rebounding to an intraday high of 24,420. Similarly, the BSE Sensex fell 290 points to 78,203 before recovering to touch 78,732. At around 10 AM, the Nifty was trading lower by 30 points, or 0.13%, at 24,323, while the Sensex was down 31 points at 78,461.

The volatility comes amid renewed tensions between the US and Iran, raising concerns over global oil supply disruptions. The US reportedly seized an Iranian cargo ship attempting to breach its blockade, while Iran responded by pulling out of further peace talks and reimposing restrictions on the Strait of Hormuz. The critical oil transit route has been closed again after both sides accused each other of violating a ceasefire following recent attacks on ships.

Global Tensions, Oil Spike Drive Market Swings

The escalation has triggered a sharp reaction in global markets. US stock futures declined, with S&P 500 futures falling around 0.8%, while Asian markets traded mixed despite recent record highs on Wall Street. Japan's Nikkei 225 rose 0.76% and South Korea's Kospi gained 0.98%, while Australia's ASX 200 declined 0.18%.

Crude oil prices surged significantly, reflecting heightened supply concerns. West Texas Intermediate (WTI) crude jumped 8.11% to $90.65 per barrel, while Brent crude rose 7.21% to $96.90. The spike in oil prices added pressure on import-dependent economies like India, contributing to cautious market sentiment.

Back home, volatility indicators also signalled rising uncertainty. India VIX surged 6.8% to 18.38, indicating increased nervousness among investors amid geopolitical developments and sharp movements in crude prices.

Despite the broader market uncertainty, stock-specific action remained active. Shares of Multi Commodity Exchange of India (MCX) rose up to 1.4% to ₹2,895 after the company received approval from SEBI to invest in a proposed coal exchange. MCX plans to initially hold a 100% stake in the new entity, with an investment of up to ₹100 crore, and may induct strategic partners later. The stock has delivered strong returns, rising 140% over the past year and 29% so far in 2026.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the market is likely to remain volatile in the near term due to ongoing geopolitical uncertainties. He noted that while tensions in West Asia continue to fluctuate, markets have not shown signs of panic despite crude oil returning to around $95 per barrel.

He added that a key trend in the current market is the outperformance of broader indices. Midcap and smallcap stocks have recovered to pre-conflict levels, unlike benchmark indices, which remain below earlier highs. Investors are rewarding companies that deliver strong earnings, even amid macro uncertainty.