MUMBAI: Stock markets tumbled in early trade on Monday amid rising crude oil prices after the US and Iran failed to reach a peace deal to end the West Asia war.
US President Donald Trump has dismissed Iran's response to the latest US peace proposal as 'totally unacceptable', dampening hopes of an immediate diplomatic breakthrough, an expert said.
The 30-share BSE Sensex tanked 845.68 points to 76,482.51 in early trade. The 50-share NSE Nifty dropped 237.90 points to 23,936.85.
From the 30-Sensex firms, Titan, InterGlobe Aviation, State Bank of India, Eternal, Bharti Airtel and Mahindra & Mahindra were among the biggest laggards.
NTPC and HCL Tech were the only winners.
Brent crude, the global oil benchmark, traded 432 per cent higher at USD 105.7 per barrel.
"Fresh concerns emerged after Donald Trump reportedly dismissed Iran's response to the latest US peace proposal as 'totally unacceptable', dampening hopes of an immediate diplomatic breakthrough.
The development has once again brought the Strait of Hormuz and broader risks of supply disruption in global energy markets back into focus," Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.
In Asian markets, Japan's benchmark Nikkei 225 index and Hong Kong's Hang Seng index were trading lower, while South Korea's benchmark Kospi and Shanghai's SSE Composite index quoted higher.
US markets ended higher on Friday.
VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, the market will face pressure from two headwinds today.
"One, the expected resolution of the West Asia crisis has again slipped away following US President Trump's rejection of Iran's letter.
Consequently Brent crude has again spiked to USD 105 potentially aggravating the current account deficit.
"Two, PM Modi's appeal to the nation to curb the consumption of petrol/diesel, gold, chemical fertilisers and edible oil and refrain from avoidable foreign travel is a crisis management response to the current account deficit problem caused by high crude prices," he added.
Emphasising that the Centre is trying to shield people from the adverse impact of the conflict in West Asia, Prime Minister Narendra Modi on Sunday called for judicious use of fuel, postponement of gold purchases and foreign travel, among other measures, to strengthen the economy.
Addressing a rally organised by the Telangana BJP in Hyderabad, he suggested reducing petrol and diesel consumption, using metro rail services in cities, carpooling, increased use of electric vehicles (EVs), utilising railway services for parcel movement, and working from home to conserve foreign exchange amid the crisis in West Asia.
Stressing the need to save foreign exchange due to the crisis, Modi called for postponing the purchase of gold and foreign travel for one year.
"We have to save foreign exchange by any means," he said, adding that due to the West Asia conflict, prices of petrol and fertilisers had increased significantly.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,110.60 crore on Friday, according to exchange data.
On Friday, the Sensex tanked 516.33 points or 0.66 per cent to settle at 77,328.19.
The Nifty dropped 150.50 points or 0.62 per cent to end at 24,176.15.