The main reason behind today’s sharp gap-down is the fresh escalation in the US–Iran conflict. Overnight strikes and retaliation increased fears of a broader Middle East conflict, leading to a risk-off mood across global markets.
At the same time, Brent crude jumped to around $95/barrel, as investors worried about possible disruption to oil supplies through the Strait of Hormuz.
For India, rising crude is a major concern because higher oil prices can increase the import bill, put pressure on the rupee and raise inflation expectations. This can also reduce the possibility of easier interest rates and impact corporate margins. As a result, investors turned cautious and selling was seen across the market, with Nifty opening around 0.8% lower and Sensex also falling sharply.
Nifty faces immediate downside pressure, with crucial support near the 23,800 zone.