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.