Sensex sinks 1,600 points, Nifty drops ~2% as US-Iran talks fail

India’s stock markets opened sharply lower on Monday as crude oil prices surged past $100 a barrel following stalled US-Iran peace talks.

At 9:15 am, the 30-share S&P BSE Sensex dropped 2.08%, or 1,613 points, to 75,937. The broader NSE Nifty 50 fell 1.92% to 23,589. Banking and midcap stocks also took a hit, with the Nifty Bank index down 2.27% and the Nifty Midcap 100 declining 2.02%.

The fall comes after a strong rally last week, when both the Sensex and Nifty gained about 6%—their best weekly performance in over five years—on hopes of a fragile US-Iran ceasefire. However, talks in Islamabad ended in a stalemate, dampening investor sentiment.

On Sunday, US President Donald Trump said the US Navy would begin blockading the Strait of Hormuz, escalating geopolitical tensions and pushing oil prices higher.

Brent crude jumped around 7% to $102 per barrel, raising concerns about inflation and economic stability.

“How this naval blockade—effectively a US response to Iran’s blockade—will play out remains uncertain. There could be dramatic geopolitical developments and corresponding market reactions,” said V.K. Vijayakumar, chief investment strategist at Geojit Investments. “In such an environment, the ideal strategy is to wait and watch.”

Foreign portfolio investors (FPIs) have continued to pull out funds, selling $5.15 billion worth of Indian equities so far in April, after record outflows of $12.7 billion in March. However, strong domestic participation has provided some cushion, with equity mutual fund inflows rising to an eight-month high of $4.4 billion in March.

Despite last week’s rally, both the Sensex and Nifty remain down about 4.5% since the start of the Iran conflict.