Sensex, Nifty 50 brace for selloff as Iran war pushes crude oil prices to $100

India's stock market is poised for a sharp plunge at the open today as the widening Iran war in West Asia sends crude oil prices soaring, threatening to reignite domestic inflation and strain the rupee.

The National Stock Exchange building in Bandra Kurla Complex, Mumbai. The geopolitical premium has already taken a toll on Dalal Street. (Reuters)

GIFT Nifty futures tumbled to 23,811 as of 7:37 am in Mumbai, signalling a steep 2.6% drop for the benchmark Nifty 50 from Friday’s close of 24,450.45. The rout tracks a broader flight from risk assets, with an index of Asian equities sinking 4.7% alongside steep declines in US and European stock futures. Meanwhile, safe-haven demand has kept the US dollar firmly supported.

The market turmoil is being driven by a violent spike in energy markets. Brent crude surged as much as 19.8% in early Asian trading to $111.04 a barrel—its highest level since July 2022—before paring slightly to trade at $108.30.

The price shock comes as an escalating US-Israeli war with Iran stokes fears of prolonged supply disruptions through the critical Strait of Hormuz. Adding to the supply constraints, Iraq and Kuwait have begun curbing oil output, compounding earlier LNG reductions from Qatar.

Geopolitical tensions have intensified dramatically over the weekend. Iran named Mojtaba Khamenei to succeed his father as Supreme Leader, signalling that hardliners remain firmly entrenched a week into the conflict. Meanwhile, Israel expanded its military campaign with strikes on Iranian commanders in Beirut early Sunday, pushing the death toll from days of attacks to nearly 400.

Even if hostilities ease, economists warn that damaged infrastructure, disrupted logistics, and elevated shipping risks could saddle global businesses and consumers with high fuel prices for months.

The geopolitical premium has already taken a toll on Dalal Street. The conflict dragged both the Nifty 50 and the S&P BSE Sensex down 2.9% last week, marking their worst weekly performance in more than a year.

Foreign institutional investors offloaded ₹6,030 crore ($654 million) of local shares on Friday, completely absorbing the ₹6,972 crore in rescue purchases made by domestic funds, according to provisional exchange data.