Sensex, Nifty slump in early trade as Middle East conflict deepens

Indian benchmark indices declined by over 1.60 per cent on Thursday, with the Nifty50 dropping around 440 points and the Sensex losing around 1,400 points.

The sharp decline was driven by several negative factors, including escalating geopolitical tensions in the Middle East.

Iran launched around 180 ballistic missiles at Israel, causing a surge in crude oil prices. Speculation is growing that Israel may retaliate by targeting major oil fields in Iran, which could further fuel the rise in oil prices.

Additionally, recent regulatory changes in the F&O segment by SEBI are expected to impact trading volumes, as retail participation may decline due to the increased contract size and limits on weekly expiries.

Meanwhile, strength in the Chinese market, following the People’s Bank of China (PunjaboC) stimulus package, has also diverted foreign investment to China, where valuations remain more attractive compared to India.