Sensex Slips and Nifty Goes Below 24,650 Due to Global Tensions; India VIX surges 10%

Indian stock markets took a serious hit today as rising tensions in the Middle East rattled investors. After news broke that Israel had carried out military strikes on Iran, the Sensex plunged about 850 points and the Nifty dropped below 24,650. Adding to the nervousness, the India VIX, basically the market’s fear meter, jumped nearly 10%, signalling a rough ride ahead.

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Geopolitical Shockwaves Hit Hard

It all started when reports came in that Israel had launched targeted attacks on Iran’s nuclear and military sites. The goal? To slow down Iran’s nuclear programme. But the bigger impact was immediate: global investors got jittery. Stocks fell worldwide, and money poured into safer bets like gold, the U.S. dollar, and Swiss francs.

Here in India, energy stocks were the first to feel the heat. The Nifty Oil & Gas index dropped by about 1.5%, with companies like BPCL, HPCL, and Indian Oil losing nearly 3.5% each.

It wasn’t just energy. All 13 sectors ended in the red. Mid-cap and small-cap stocks also took a beating, each falling around 1.2%. It was a tough day no matter where you looked.

Sensex and Nifty: Numbers You Need to Know

The Sensex ended the day on June 12, more than 850 points lower, closing between 81,700 and 81,800. The Nifty lost about 1.2% and wrapped up just under 24,650, landing around 24,586.

Big-name stocks like L&T, Infosys, and ICICI Bank were major drags on the market. Airline stocks like InterGlobe Aviation and SpiceJet also struggled, but for different reasons. That drop was tied to a tragic Air India crash in Ahmedabad.

Crude Oil Prices Climb Fast

With the threat of more conflict looming, Brent crude oil surged over 9–11%, briefly hitting $77 a barrel, a level not seen in years. This spike has revived fears about potential disruptions to oil supplies, especially through the critical Strait of Hormuz.

Experts are warning that for every $10 increase in crude, India’s current account deficit could grow by 0.4% of GDP. Inflation could also rise by about 35 basis points.

Meanwhile, the rupee is under pressure too. It's expected to open above ₹86 per U.S. dollar, up from ₹85.60.

Volatility Takes Centre Stage

The India VIX, which measures market volatility, shot up nearly 10%. It’s a clear sign that investors are bracing for more wild swings, something we've seen before during past geopolitical crises.

Historically, when the VIX spikes like this, like it did during the Iran-Israel tension back in October 2024, it usually means a bumpy road ahead for markets.

Global Domino Effect

India wasn’t alone. Markets across Asia fell too, with MSCI’s Asia-ex-Japan index down about 1%. U.S. equity futures also dipped as traders turned cautious. U.S. Treasury yields slipped (the 10-year is now around 4.33%), and the dollar index climbed to the 98 range, showing a clear move toward safety.

What Experts Are Saying

Devarsh Vakil from HDFC Securities summed it up: the market drop was driven by a mix of international conflict and domestic tragedy.

DBS Research added that investors will now be laser-focused on whether things in the Middle East get worse.

Shrikant Chouhan from Kotak Securities warned that the combo of rising oil prices and a general “risk-off” mood could keep markets under pressure for a while.

What Happens Next?

If the conflict escalates, we could see even higher oil prices and more volatility, which would strain India’s economy further.

But not all is doom and gloom. If global central banks ease up on rate hikes or tensions cool down, markets could catch a break. Strong domestic economic data or sharp pullbacks in stock prices might also create opportunities for smart investors.

Conclusion

Today was a reminder of how fast things can change. The sharp fall in Indian markets, the oil price spike, and the jump in volatility all show how deeply global conflicts and heartbreaking local events can shake investor confidence. Going forward, all eyes will be on how the Middle East situation unfolds and how central banks respond around the world.