Fresh hostilities between Iran and Israel send shockwaves across world markets; Brent crude surges past $97, South Korea's Kospi sinks 8%

Markets Open in the Red

Indian equity markets were jolted into a steep sell-off on Monday, 8 June 2026, as renewed hostilities between Iran and Israel sparked a sharp risk-off mood across global financial markets. The BSE Sensex crashed 719 points to settle at 73,524.26, while the NSE Nifty50 slumped roughly 1% to close at 23,123 points — its sharpest single-session decline in recent weeks.

The selling was broad-based and swift. Blue-chip names bore the brunt of the fall, with TCS, Eternal, Mahindra & Mahindra, IndiGo, Bajaj Finance, and Larsen & Toubro among the prominent losers on the Sensex. Investor sentiment soured quickly through the morning session, and there was little recovery through the day.

Sectoral Pain, With Pockets of Resilience

Across the NSE's sectoral indices, the damage was widespread. Nifty Realty led the losses, tumbling nearly 2%, followed by declines across financial services, auto, and IT. Only Nifty Pharma, PSU Bank, and Healthcare managed to hold their ground and end Monday in positive territory — a thin silver lining in an otherwise bruising session.

Iran-Israel Exchange Ignites Market Fear

The trigger was unmistakable. Israel launched military strikes on Iran on Monday, following a wave of Iranian missiles targeting Israeli territory. Tehran accused Israel of repeatedly violating a ceasefire agreement through its ongoing operations in Lebanon. The exchange drew fresh condemnation internationally, with reports indicating the attacks proceeded despite a direct appeal from US President Donald Trump to de-escalate.

The geopolitical flare-up instantly introduced a new layer of uncertainty into an already fragile global environment, sending investors scrambling toward safer assets and away from equities.

Oil Prices Surge Past $97

Energy markets reacted sharply. Global benchmark Brent crude surged over 4% to $97.19 per barrel, while West Texas Intermediate climbed 3.35% to $93.89. The spike reflects growing anxiety over supply disruptions in the Middle East — a region that remains central to global oil flows. Higher crude prices also add inflationary pressure to import-heavy economies like India, compounding concerns for domestic markets.

Asian Markets in Freefall

The carnage was not limited to Dalal Street. South Korea's Kospi bore the sharpest blow, plunging 8% — a level that typically triggers circuit breakers — to settle at 7,768 points, down 375 points. Japan's Nikkei fell 3.83% to 64,040, losing over 2,500 points in a single session. Hong Kong's Hang Seng declined a more moderate 1.01% to 24,700.

Wall Street Had Already Signalled Trouble

The rout had been foreshadowed on Friday. US markets ended last week under significant pressure — the Dow Jones Industrial Average slid 695 points (-1.35%) to 50,867, the S&P 500 shed 201 points (-2.64%) to 7,384, and the tech-heavy Nasdaq took the hardest hit, falling 1,122 points (-4.18%) to 25,709. That Wall Street selloff set a grim tone heading into Monday's Asian and Indian sessions.

FIIs Pull Back Sharply

Foreign institutional investors have been pulling money out of Indian equities at a notable pace. On 5 June, FIIs and FPIs recorded a net outflow of ₹8,776 crore. Over the last seven days, cumulative FII selling reached ₹27,203 crore, and over the past month the figure stands at a substantial ₹76,006 crore. Domestic institutional investors have been providing partial cushioning — buying ₹9,134 crore on the latest session and ₹95,209 crore over the past 30 days — but have not been able to fully offset the foreign outflows.

Rupee Under Pressure

The Indian rupee also weakened under the day's pressure, falling 17 paise to 95.35 against the US dollar in early trade on Monday, reflecting the combined effect of FII outflows, rising oil import costs, and broader dollar strength in a risk-averse global environment.

Market participants will closely track developments in the Middle East through the week, with any further escalation likely to deepen the sell-off across emerging market equities including India.

Indian equity markets staged a recovery on Tuesday after a weak start, with both benchmark indices ending in the green. The Sensex settled at 74,649.84, gaining 382 points over the previous close, while the Nifty50 climbed 101 points to finish at 23,483.55. The recovery came a day after both indices took a sharp hit on June 1, when the Sensex had shed 508 points and the Nifty had slipped 165 points to close at 23,382.

IT Stocks Lead the Charge

Tuesday's rebound was driven largely by information technology shares, which saw strong buying interest across the board. On the National Stock Exchange, Nifty IT emerged as the top sectoral gainer, surging 4.25% by close. Most other sectoral indices also ended in positive territory. Nifty Pharma, Financial Services, and a handful of other segments were exceptions, closing with marginal losses even as broader sentiment turned positive through the session.

South Korea Leapfrogs India

Away from the trading floors, a significant shift in the global pecking order drew attention. South Korea's stock market has overtaken India to become the world's sixth-largest by total market capitalisation. According to Bloomberg data, the combined market cap of South Korean listed companies has surged 86% this year to reach $5 trillion, roughly ₹475 lakh crore.

India's market cap, by contrast, has slipped to around $4.8 trillion, or approximately ₹456 lakh crore. The Korean surge has been led in large part by its heavyweight semiconductor companies, which have been riding a sustained wave of global demand for artificial intelligence infrastructure. Earlier this year, Taiwan had already moved ahead of India on the same measure, making South Korea the second Asian market to do so in quick succession.

Asian Markets See Mixed Trade

The mood across Asian markets on Tuesday was uneven. South Korea's KOSPI fell 154 points, or 1.45%, to 8,634, even as the country's overall market cap milestone drew attention. Japan's Nikkei dropped sharply by 1,101 points, or 1.64%, to close at 65,833. Hong Kong's Hang Seng bucked the trend, gaining 242 points — up 0.97% — to end at 25,641.

Wall Street Closed on a Positive Note

US markets provided a stable backdrop heading into Tuesday's session. The Dow Jones Industrial Average added 46 points to close at 51,079, while the Nasdaq rose 114 points to 27,087. The S&P 500 gained 20 points, finishing at 7,600. The mild but consistent gains on Wall Street offered some reassurance to domestic investors navigating a volatile stretch.

FIIs Continue to Pull Out

Institutional flow data continued to reflect a cautious foreign investor stance. Foreign institutional investors net sold shares worth ₹3,912 crore in Tuesday's session. Over the past seven days, net FII outflows stand at ₹26,060 crore, and over the last 30 days the figure has climbed to nearly ₹59,875 crore — close to ₹60,000 crore in a single month.

Domestic institutional investors have been absorbing much of that pressure. DIIs bought shares worth ₹5,109 crore on Tuesday, with net purchases totalling ₹25,694 crore over the past week and ₹87,778 crore over the past month, providing a significant cushion against foreign outflows.

What to Watch Next

With South Korea and Taiwan both now ahead of India by market cap, attention will likely turn to whether a sustained recovery in IT and other export-linked sectors can help domestic markets regain ground. The near-term trajectory will depend on global cues, the pace of FII outflows, and upcoming macro data. For now, Tuesday's rebound offered some relief after a rough Monday, though the broader picture remains one of cautious consolidation.

Indian equity markets remained closed on Thursday on account of Bakrid, while commodity (MCX) trading will resume later in the evening, market officials confirmed. The holiday came as Asian stock indices slid sharply and crude oil prices jumped amid renewed tensions in the Middle East, denting investor sentiment ahead of the weekend.

Markets closed for Bakrid

The BSE and NSE did not operate on Thursday because of the Bakrid public holiday, a routine annual closure. Commodity exchanges, including MCX, were inactive until late afternoon; trading is scheduled to restart at 5:00 pm IST, exchange notices showed. Stock broking desks said most overseas markets were open, leaving Indian investors to track global cues remotely.

Asian markets slide

Asian equities suffered notable declines on Thursday. South Korea’s KOSPI dropped about 3.1% in early trade, while Hong Kong’s Hang Seng fell roughly 2.3% and Japan’s Nikkei eased around 1.2%, exchange feeds indicated. Market strategists linked the weakness to a sharp rise in crude oil and lingering geopolitical worries after fresh US-Iran tensions.

US markets firmed; mixed signals

Wall Street closed modestly higher on Wednesday, with the Dow Jones adding 0.36% and the Nasdaq nearly flat, data showed. But that limited uplift failed to translate into Asian gains overnight. “US markets were steady, but the spike in oil and heightened risk aversion in Asia outweighed the follow-through,” a Hong Kong-based strategist said on condition of anonymity.

FIIs net sellers

Data compiled by exchange sources showed continued foreign institutional investor (FII/FPI) outflows. Over the past 30 days, FIIs sold equities worth about ₹45,374 crore, while domestic institutional investors (DIIs) remained net buyers, purchasing roughly ₹71,654 crore over the same period. In the latest seven-day window, FIIs were net sellers to the tune of around ₹7,069 crore, compared with DII buys of ₹15,043 crore.

Domestic indices fell earlier

On Wednesday, when markets were open, the BSE Sensex closed down 142 points at 75,868 and the Nifty 50 slipped 7 points to finish at 23,907. Banking stocks underperformed, brokers said, reflecting profit-taking after a recent rally and sensitivity to macro and liquidity expectations.

Crude surge fuels concerns

A key immediate trigger was a near 4% rise in Brent crude to about $98 per barrel on Thursday, traders said, citing renewed US-Iran tensions. Higher oil directly affects inflation and input costs globally and is particularly sensitive for India, which imports an estimated 80–85% of its crude needs. “When oil spikes, the trade deficit and inflation outlook worsen, the rupee can weaken, and corporate margins—especially for fuel-intensive sectors—come under pressure,” an equity economist noted.

Why oil hits Indian markets

Analysts explained that rising crude increases import bills, pressuring the rupee and raising costs for manufacturers, transporters and airlines. That squeezes corporate profits and can erode equity valuations. Retail inflation risks could also prompt tighter monetary stance expectations, adding to investor caution.

Ground-level cues

On the trading floors and at brokerage firms in Mumbai’s Dalal Street, traders spent the holiday monitoring late-session commodity trades and global headlines. “We were more focused on oil and flows from FIIs. With markets closed, clients expect a quiet holiday but want updates before the close in the US,” said a Mumbai broker who declined to be named.

What to watch next

Market participants will watch MCX’s evening session for any volatility in energy contracts and refine positions ahead of Friday’s truncated session. The rupee’s movement versus the dollar, upcoming US economic data, and any further geopolitical developments will be key near-term drivers. Investors will also track central bank commentary and domestic macro prints that could influence DII behavior.

For now, the Bakrid holiday gave local investors a pause to reassess exposures while global factors—especially a resurgent crude oil price—kept risk sentiment subdued. If oil maintains elevated levels into next week, strategists warn, Indian markets may face renewed pressure once trading resumes fully.

Sensex Climbs 400 Points to 75,700; Nifty Crosses 23,790 

Indian equity benchmarks opened on a firm note on Thursday, May 21, with the Sensex rising over 400 points to trade near 75,700 levels and the Nifty advancing to 23,790 in early morning deals. Strong buying interest was visible in PSU bank and metal stocks, lifting broader market sentiment.

The 30-share BSE Sensex was quoting at 75,700 with a gain of around 400 points, or 0.50 per cent. The broader NSE Nifty 50 climbed about 130 points, or 0.55 per cent, to hover around 23,790. The rally followed a modestly positive close on Wednesday, when the Sensex ended at 75,318 and Nifty at 23,659 after recovering from early losses.

Sectoral Strength in PSU Banks and Metals

PSU banking stocks led the charge amid renewed domestic institutional interest. Several public sector lenders traded higher as investors bet on steady credit growth and policy continuity. Metal shares also attracted buyers, tracking firm global commodity cues and expectations of sustained demand in key sectors.

Traders pointed to selective buying in frontline names even as foreign institutional investors remained net sellers. Data showed FIIs offloaded shares worth ₹1,597 crore on Wednesday, though domestic institutional investors countered with purchases of nearly ₹1,968 crore.

Positive Asian Cues Support Sentiment

Sentiment received a boost from sharp gains across several Asian markets. South Korea’s KOSPI surged over 7 per cent, while Japan’s Nikkei climbed nearly 3.6 per cent. Hong Kong’s Hang Seng ended marginally higher. The upbeat regional mood came after Wall Street closed in the green on Wednesday, with the Dow Jones, Nasdaq, and S&P 500 all posting decent gains.

Market participants remained watchful of global factors, including crude oil prices and currency movements. Despite some pressure on the rupee in recent sessions, domestic buying helped indices stay resilient.

Market Breadth and Volumes

Market breadth was largely positive in the initial hours, with advances outpacing declines on both BSE and NSE. Midcap and smallcap segments also saw selective participation, though gains were more pronounced in largecaps. Turnover remained healthy as traders adjusted positions ahead of key global earnings triggers and domestic developments.

Analysts noted that the indices have been consolidating in a range in recent weeks. The current upmove could test immediate hurdles if buying sustains through the day. Key support levels for Nifty are seen around 23,500-23,600, while resistance lies near 23,900-24,000.

FII-DII Dynamics in Focus

The contrasting behaviour of foreign and domestic investors continues to shape near-term flows. While FIIs have been net sellers over the past month, DIIs have provided strong support with consistent buying. This cushion has helped the market absorb global volatility stemming from geopolitical tensions and monetary policy signals from major economies.

Outlook for the Day

Traders will now watch for sustained momentum in PSU banks and metals. Any fresh trigger from global markets, particularly US tech earnings, could influence the trajectory in later hours. Analysts remain cautiously optimistic, citing steady domestic macros and resilient corporate earnings in select pockets.

As the trading session progresses, focus will remain on whether the indices can hold above psychological levels and extend the morning gains. Investors are advised to monitor global cues closely while maintaining strict risk management in the current volatile environment.

The market is expected to trade with a positive bias if buying in key sectors continues, though profit-booking at higher levels cannot be ruled out.