Sensex Plunges 1,337 Points in Early Trade as Middle East Tensions Escalate Following Israel-Iran Strikes
Market Turmoil Amid Geopolitical Crisis
Mumbai: | 13 June 2025 | Indian equity markets witnessed a sharp sell-off on Monday, with the BSE Sensex crashing 1,337 points in early trade, as investors reacted to escalating tensions in the Middle East following Israel’s retaliatory strikes on Iran. The Nifty 50 also dropped sharply, falling below the 22,000 mark, reflecting heightened risk aversion in global markets.
Key Market Developments
Sensex opened 1.8% lower at 72,245, extending Friday’s losses.
Nifty 50 fell 1.6% to 21,900, with banking and oil & gas stocks leading the decline.
Global markets, including Asian and European indices, traded deep in the red as fears of a wider conflict grew.
Brent crude surged past $90 per barrel, raising concerns over inflation and India’s import costs.
Why Are Markets Falling?
The sharp correction comes after Israel launched targeted strikes on Iran late Friday, escalating geopolitical risks in the oil-rich region. Key factors driving the sell-off:
Flight to Safety: Investors shifted funds to gold and US Treasuries, pushing gold prices to record highs.
Oil Price Shock: Rising crude prices threaten India’s trade deficit and inflation outlook.
FPI Outflows: Foreign investors pulled out ₹2,500 crore from Indian equities in early trade.
Sectoral Impact: Banking, aviation, and energy stocks were the worst hit due to higher crude costs.
Expert Views on Market Outlook
Sanjeev Prasad, Kotak Institutional Equities: “If tensions persist, markets may see further downside as risk premiums rise.”
Shrikant Chouhan, Kotak Securities: “Investors should avoid aggressive bets until geopolitical risks stabilize.”
Nomura Report: “A prolonged conflict could disrupt supply chains and delay rate cuts globally.”
5 Critical Questions for Investors
Will the RBI delay rate cuts if oil prices remain elevated?
How long will FPI outflows continue if Middle East tensions worsen?
Which sectors are most vulnerable to a prolonged oil price surge?
Could this crisis trigger a deeper correction in global markets?
What defensive strategies should retail investors adopt?
Market Recovery Prospects
While the immediate reaction has been negative, analysts suggest that:
A de-escalation in Iran-Israel tensions could trigger a rebound.
Strong corporate earnings may cushion further downside.
DIIs (Domestic Institutional Investors) could step in to support markets.
Indian Stock Market: Cautious Approach Advised
The Sensex crash highlights how geopolitical shocks can disrupt financial markets unexpectedly. Investors should monitor developments closely and consider hedging strategies to mitigate risks.
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