Mumbai, April 6 (NationPress) The domestic equity markets commenced the week on a cautiously optimistic note this Monday. However, concerns regarding a potential escalation in the Iran conflict restrained any significant gains. This caution follows a stern warning from US President Donald Trump, who threatened severe repercussions if Tehran does not comply with his deadline to reopen the Strait of Hormuz by Tuesday.

Despite an initial positive momentum, the early gains proved fleeting. The 30-share Sensex fell by 150 points, or 0.21%, settling at 73,168. Likewise, the Nifty index was recorded at 22,670, down 42 points, which is a 0.19% decline, amid selling pressure affecting stocks like IndiGo, Kotak Mahindra Bank, Tata Steel, and Sun Pharma, all of which dropped by as much as 2%.

Earlier in the session, the Nifty had opened at 22,780, marking an initial rise of 67 points or 0.30%, while the Sensex increased by 158 points or 0.22% to reach 73,477.53.

During the early trading phase, most sectoral indices were in the green, with banking and automotive stocks leading the way. The Nifty PSU Bank index rose by 0.51%, and the Nifty Private Bank index saw an increase of 0.30%. The Nifty Auto, Financial Services, and IT indices also recorded positive movements.

In the broader market, indices such as Nifty 100, Nifty 200, and Nifty 500 advanced by up to 0.31%. Additionally, the midcap and smallcap indices also experienced modest gains.

Conversely, the Nifty Metal index fell by 0.22%, with the Pharma and Realty indices slightly declining.

Amidst this, volatility remained heightened, with the India VIX surging over 2%, indicating a persistent cautious sentiment among investors due to geopolitical instability.

Market analysts noted that the ongoing tensions between Iran, Israel, and the US keep investors on edge, especially given the lack of progress in ceasefire negotiations. Although US markets ended the previous week on a positive note, buoyed by strong employment data, overall sentiment remains fragile due to rising crude oil prices and geopolitical uncertainties.

They emphasized that the upcoming meeting of the RBI's MPC could serve as a critical catalyst this week, with any indications of de-escalation potentially supporting a market rebound. On the domestic front, improvements in commercial vehicle sales suggest early signs of recovery in economic activities and earnings.

Market sentiment is notably fragile with geopolitical tensions, as investors keep a close watch on developments surrounding the Strait of Hormuz, a vital global oil passage.

In the last trading session, foreign institutional investors (FIIs) continued their selling spree, offloading equities worth Rs 9,931 crore, while domestic institutional investors (DIIs) remained supportive, acquiring equities worth over Rs 7,200 crore.

Crude oil prices surged significantly, heightening concerns. Brent crude prices increased by 2% to reach $111.23 per barrel, nearing a 52-week high, while US WTI crude futures climbed by 3.53% to $115.48 as of 8:55 a.m.

In the Asian markets, trends were mixed. Japan's Nikkei traded approximately 1% higher, while Hong Kong's Hang Seng saw a decline of about 1%. Conversely, South Korea's Kospi gained nearly 1%.

In the previous session, Wall Street closed marginally higher, with the S&P 500 finishing at 6,582.69, reflecting a 0.11% increase, and the Nasdaq rose by 0.18% to reach 21,879.18.