BSE Sensex tumbled as much as 943 points or 1.22 per cent to an intraday low of 76,384 on Monday, 11 May, while the Nifty50 shed 280 points or 1.15 per cent to 23,897, after US President Donald Trump rejected Iran's response to a peace proposal over the West Asia conflict, sending Brent crude surging past $105 per barrel. The breakdown in diplomacy erased hopes of an imminent resolution to the 10-week-long US-Iran standoff that had kept oil transit through the Strait of Hormuz under threat.

How the Markets Opened

The Sensex opened at 76,638.09, already down 690.10 points or 0.89 per cent, before extending losses to a peak decline of 1.22 per cent in morning trade. The Nifty50 opened nearly 200 points lower at 23,970.10, down 0.85 per cent, before sliding further to 23,897. The India VIX, the market's volatility gauge, rose nearly 2 per cent to 10.7, signalling heightened investor anxiety.

Sector-Wide Selloff

All sectoral indices traded in the red, with Nifty Consumer Durables, Nifty Auto, Nifty PSU Bank, Nifty Private Bank, Nifty Oil & Gas, and Nifty Chemicals falling up to nearly 3 per cent. Among individual Nifty stocks, Titan, IndiGo, Mahindra & Mahindra, Shriram Finance, Eternal, Maruti Suzuki, Bajaj Auto, Bajaj Finserv, Bharti Airtel, HDFC Life, Eicher Motors, and Dr Reddy's Laboratories were among the top laggards. Defensive sectors such as pharmaceuticals were expected to remain relatively resilient amid the broader selloff.

The Trump-Iran Flashpoint

The trigger for Monday's rout was President Trump's Sunday rejection of Iran's reply to a US peace proposal. On a social media platform, Trump posted: "I have just read the response from Iran's so-called 'Representatives.' I don't like it — TOTALLY UNACCEPTABLE! Thank you for your attention to this matter." The rejection dashed hopes that the Strait of Hormuz — a critical artery for global oil shipments — could reopen to normal transit, keeping crude prices elevated.

Oil Surge and Macro Implications

Brent crude rose 4.41 per cent to $105.76 per barrel, while US West Texas Intermediate (WTI) gained 5.12 per cent to $100.31 per barrel. According to a market expert, the crude spike risks worsening India's current account deficit. The expert noted that Prime Minister Narendra Modi's recent appeal to citizens to curb consumption of fuel, gold, chemical fertilisers, and edible oil — and to avoid unnecessary foreign travel — reflects a crisis-management posture in response to elevated crude prices. The expert added: "This call for austerity carries slightly negative implications for economic growth in FY27. Industries linked to petroleum, fertilisers, gold, aviation, hotels and related sectors are likely to face sentiment-driven pressure. Defensive sectors such as pharmaceuticals may remain resilient."

Asian Markets and What to Watch

Asian markets traded mixed on Monday. Japan's Nikkei and Hong Kong's Hang Seng were each down 0.3 per cent, while South Korea's KOSPI bucked the trend, rising over 4 per cent. Investors will closely track any further diplomatic signals from Washington and Tehran, as well as the trajectory of crude prices, which will directly influence India's fiscal arithmetic and sectoral earnings for FY27.