Equities slumped, and the rupee fell to 93.97 against the US dollar on Monday, tracking declines across Asia as the West Asia conflict kept oil prices high and raised concerns over global growth.
However, the GIFT Nifty index surged nearly 4 per cent on Monday evening after US President Donald Trump said military strikes on Iranian power plants would be postponed for five days following talks with Tehran.
The index jumped 865.50 points, or 3.81 per cent, to 23321.50 after the announcement on Truth Social. The rise in GIFT Nifty indicates domestic markets may see a relief rally on Tuesday after a sharp sell-off in Monday’s session.
Following Trump’s announcement, Brent oil futures dropped more than 14 per cent to $96 a barrel. West Texas Intermediate also declined, while European natural gas prices plunged.
The S&P 500 leapt 1.9 per cent toward its best day since well before the war began, even though Iran denied there were any negotiations.
In Europe, stock indexes immediately flipped from losses to gains following Trump’s announcement and then held onto them. France’s CAC 40 jumped 1.7 per cent, and Germany’s DAX returned 2.2 per cent.
That compares with sharp drops for Asian stock indexes, which finished trading before Trump made his announcement. South Korea’s Kospi careened 6.5 per cent lower, Japan’s Nikkei 225 dropped 3.5 per cent, and Hong Kong’s Hang Seng fell 3.5 per cent.
Equity impact
The Nifty 50 and the Sensex are down 10.6 per cent each since the Iran war began at the end of February as foreign investors pulled out, while surging oil prices stoked inflation fears and darkened the country’s growth outlook.
The Nifty 50 fell 2.6 per cent to 22512.65 on Monday, while the Sensex lost 2.46 per cent to 72696.39.
All 16 major sectors fell. Small-cap and mid-cap indexes dropped 3.9 per cent each. The volatility index, which tracks expected swings over 30 days, rose to 27.17 during the session, its highest since early June 2024.
High oil prices and foreign outflows of nearly $10 billion in March have been pressuring the rupee, while a gauge of emerging market currencies slid to a four-month low.