Mumbai, India — Indian benchmark equity indices opened significantly lower on Monday, June 23, 2025, as investors reacted sharply to escalating tensions in the Middle East. The downturn followed United States airstrikes on three nuclear facilities in Iran—Fordow, Natanz, and Isfahan—carried out on Sunday.
The BSE Sensex index witnessed a sharp decline in early trade, tumbling by 705.65 points to touch 81,702.52. While the initial losses were steep, the index later pared some of its declines, being reported at 81,747, still lower by 653 points or 0.79 per cent from its previous close.
Similarly, the Nifty50, India’s broader benchmark, dropped 182.85 points to 24,929.55 shortly after the market opened. It also saw a slight recovery from its lowest point but remained firmly in the red, last trading at 24,920, down 192 points or 0.76 per cent.
Geopolitical Fallout Drives Volatility
The immediate trigger for the market’s negative opening was the geopolitical uncertainty stemming from the US strikes in Iran. The attacks targeted key nuclear infrastructure, intensifying the long-standing animosity between the two nations. Following the strikes, Iran has publicly vowed retaliation. Adding to the market’s anxiety, reports indicated that Iran’s Parliament has reportedly approved the closure of the strategically vital Strait of Hormuz, a critical chokepoint for global oil shipments. This potential disruption to energy supplies and trade routes fueled widespread risk aversion among investors globally, impacting emerging markets like India.
Despite the initial and significant drawdown in the benchmark indices, markets demonstrated some resilience through the trading session. Both the Sensex and Nifty managed to recover approximately half of their initial losses, suggesting underlying buying interest emerged at lower levels or as the initial shock subsided.
Broader Markets Show Strength, Sectors Diverge
Interestingly, the sentiment in the broader market indices diverged from the benchmarks. The Nifty MidCap index saw positive traction, gaining by a modest 0.12 per cent. The Nifty SmallCap index also outperformed the frontline indices, posting a gain of 0.41 per cent. This suggested that while large-cap stocks sensitive to global macroeconomic and geopolitical risks faced pressure, there was selective buying interest in the mid and small-cap segments.
Performance across sectors was highly varied, indicating a risk-off sentiment combined with sector-specific responses to the geopolitical climate. Broad-based selling was observed across most sectors on the National Stock Exchange, with notable exceptions.
The Nifty Media index stood out as the top performer, surging by 3 per cent against the prevailing downtrend. Conversely, sectors heavily reliant on global stability or domestic consumption faced pressure. The Nifty IT index fell by 1.53 per cent, reflecting concerns about global tech spending. The Nifty Auto index declined by 1.06 per cent, and the Nifty FMCG index was down by 0.52 per cent.
Defence Stocks Rally
A significant beneficiaries of the heightened geopolitical tensions were defence-related stocks. The Nifty India Defence index traded robustly, showing a gain of 1.3 per cent. This upward movement is directly attributable to expectations of increased defence spending and procurement in response to regional instability.
Among individual stocks on the Sensex, the list of gainers included Bharat Electronics (BEL), Trent, Eternal (Zomato), and Bharti Airtel. These stocks posted gains of up to 1.89 per cent, contributing to the benchmark’s partial recovery. On the other hand, several heavyweight stocks were among the major laggards, dragging the index down. These included Infosys, Hindustan Unilever, HCLTech, TCS, and Reliance Industries, underscoring the broad nature of the early selling pressure.
In summary, Indian equity markets experienced significant volatility on Monday, directly influenced by escalating geopolitical tensions in the Middle East. While benchmark indices saw sharp initial declines triggered by the US strikes on Iran and subsequent threats, they managed to stage a partial recovery. The day’s trading highlighted a clear divergence, with broader market indices showing resilience and specific sectors like Defence and Media outperforming significantly, contrasting with declines in sectors like IT, Auto, and FMCG.
