Geopolitical Shockwave: Sensex, Nifty Tumble After US Action in Iran

A sudden escalation in Middle East tensions sent a shockwave through the Indian stock market on Monday, June 23, 2025. Reports of US airstrikes on Iranian nuclear facilities triggered a significant sell-off over fears of a wider conflict and surging oil prices, leading to a volatile day on Dalal Street.

The day began on a deeply negative note, with benchmark indices tumbling as the market opened. The trigger was breaking news of US airstrikes on key Iranian nuclear facilities at Fordow, Natanz, and Isfahan. This development created a classic risk-off environment, prompting investors to dump equities and seek safer havens.

A Volatile Day on the Street

The market’s reaction was swift. In early trade, the 30-share BSE Sensex plunged 705.65 points to an intraday low of 81,702.52. Similarly, the 50-share NSE Nifty 50 dropped 182.85 points to 24,929.55, opening with a significant gap-down that reflected investor anxiety.

However, the markets showed resilience as the day progressed. A partial recovery during the afternoon session saw indices claw back some initial losses, aided by buying in heavyweight stocks like the Bajaj twins, Tata Steel, and Kotak Bank.

Ultimately, the Sensex closed at 81,897.17, a loss of 511 points (0.62%). The Nifty 50 finished below the crucial 25,000 mark at 24,987.80, down 124.60 points (0.50%).

Oil and Uncertainty: The Core Catalysts

The primary driver of this turmoil was the direct US involvement in the escalating Israel-Iran conflict. With Iran vowing retaliation, fears of a full-blown regional war that could disrupt global trade and crude oil supplies rattled investors.

The impact on energy markets was immediate. Brent crude futures jumped over 2% to trade around $78.60 per barrel. As a major net importer of oil, India’s economy is highly sensitive to crude prices. A sustained spike can fuel inflation, widen the current account deficit, and pressure the rupee—all negatives for corporate earnings and market sentiment.

Reflecting the heightened anxiety, the India VIX, the market’s “fear gauge,” spiked by over 15% during the day.

Sectoral Spotlight: Defence Rallies, IT Falters

The risk-averse mood led to broad-based selling. The Nifty IT index was a major casualty, falling over 1.5%, hurt by both global uncertainty and Accenture’s recent weak guidance on tech spending. The Nifty Auto and FMCG indices also ended with losses of over 1% and 0.5%, respectively.

In a classic response to geopolitical conflict, defence stocks bucked the trend. The Nifty India Defence index climbed 1.3%, with stocks like Paras Defence, Bharat Dynamics, and Garden Reach Shipbuilders gaining up to 3% on expectations of increased government spending.

The broader market, however, showed pockets of strength. The Nifty MidCap and SmallCap indices outperformed their large-cap peers, suggesting that some domestic-focused investors were looking past the immediate global headwinds.

Investor Outlook: Key Factors to Monitor

The market’s direction in the coming days will be dictated by developments in the Middle East. Investors should closely watch the following:

• Crude Oil Prices: The trajectory of Brent crude is critical. A sustained climb towards the $85-90 mark could trigger further selling pressure.
• FII Activity: Foreign Institutional Investors (FIIs), who were net buyers recently, turned sellers today. Continued outflows could exacerbate the fall.
• Nifty’s Technical Levels: Analysts are watching key levels. According to Rupak De of LKP Securities, 24,850 is now crucial support for the Nifty. A decisive break below this could signal further downside, while the 25,200 level remains a significant resistance.
• Global Market Cues: Asian markets like Japan’s Nikkei and South Korea’s Kospi also closed lower, and European markets opened in the red. Global sentiment will continue to be a key influence.

For retail investors, the current environment demands caution. While the partial recovery suggests underlying strength, the geopolitical situation remains fluid. Panic selling is rarely advisable, but this is an opportune moment to review portfolio risk and avoid aggressive new positions until the uncertainty subsides.

---

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please conduct your own research before making any investment decisions.