Stock markets plunge nearly 1% as US-Iran talks collapse

PTI

New Delhi

Benchmark stock indices Sensex and Nifty closed nearly 1% lower on Monday as the failure of US-Iran negotiations heightened concerns of a prolonged conflict driving crude oil prices sharply higher.

The 30-share BSE Sensex tumbled 702.68 points or 0.91% to settle at 76,847.57. During the day, it dived 1,681.93 points or 2.16% to 75,868.32. The 50-share NSE Nifty plunged 207.95 points or 0.86% to end at 23,842.65.

From the 30-Sensex firms, Maruti, InterGlobe Aviation, Bajaj Finance, Reliance Industries, Tata Consultancy Services and HDFC Bank were the biggest laggards. ICICI Bank, NTPC and Axis Bank were the winners.

The US and Iran failed to reach a peace deal at their 21-hour talks in Pakistan, leaving the fate of a tenuous two-week ceasefire in doubt. Both sides attempted to hold each other responsible for the collapse of the negotiations. Brent crude, the global oil benchmark, jumped 7.73% to $102.6 per barrel.

In Asian markets, South Korea's benchmark Kospi, Japan's Nikkei 225 index and Hong Kong's Hang Seng index ended lower, while Shanghai's SSE Composite index settled marginally higher. European markets were trading lower, while US markets had ended on a mixed note on Friday.

Vinod Nair, head of research at Geojit Investments Limited, said markets continue to derive limited support from last week’s ceasefire framework, which remains intact for now. "This comes despite an initial negative reaction to the breakdown of US-Iran peace talks and the announcement of a US naval blockade in the Strait of Hormuz, which pushed crude prices above $100/bbl," Nair said, adding that elevated oil prices are raising concerns around inflation, currency stability and broader macro balances.