Indian equity markets witnessed a sharp selloff on Friday, 13 June 2025, with both the Sensex and Nifty plunging over 1.5 percent each. The selloff was triggered primarily by geopolitical tensions between Israel and Iran, which led to a steep spike in Brent crude prices.

The BSE Sensex dropped 1,337 points or 1.63 percent to close at 80,354.59, while the NSE Nifty 50 fell 415.20 points or 1.67 percent to end the session at 24,473.

This marked one of the sharpest single-day declines in recent weeks, prompting widespread concerns across sectors, especially oil and banking.

Tensions in the Middle East trigger oil price rally

The immediate trigger for the market drop was the announcement that Israel had conducted a targeted military operation against Iran’s nuclear infrastructure, including ballistic missile manufacturing units and key military leaders. This move intensified fears of a prolonged geopolitical conflict in the region.

Following the announcement, Brent crude oil futures for August delivery surged over 13 percent, briefly touching a high of 78.50 dollars per barrel. As per the latest data, prices remained elevated at 75.36 dollars, still up 8.79 percent.

In parallel, West Texas Intermediate (WTI) crude oil traded near 75 dollars per barrel, indicating sustained global pressure on oil markets.

Impact on Indian oil companies and broader indices

The spike in oil prices sent shockwaves through Indian oil marketing companies. Stocks of BPCL, HPCL, and IOC fell by up to 4 percent on fears that their refining margins would take a hit due to higher input costs.

Broader market sentiment remained weak, with banking and metal stocks also witnessing sharp declines. The weakness in banking stocks came despite the Reserve Bank of India announcing a substantial rate cut, aimed at providing liquidity support.

Domestic pressures add to global uncertainty

Prashanth Tapse, Senior VP of Research at Mehta Equities, said,
Markets are gripped by caution as bearish signals intensify on this ominous Friday the 13th. Despite the RBI’s jumbo rate cut, banking stocks remained under pressure and foreign institutional investors have sold Rs 3,549 crore in June so far.

The continued FII outflows have weighed heavily on market sentiment, further exacerbating the volatility caused by global developments.

Global impact and Asia market trends

The decline in Indian markets was mirrored across major Asian indices. Benchmarks in Japan, mainland China, Hong Kong, South Korea, and Taiwan all registered losses of up to 1.3 percent.

Globally, investor confidence remained shaky amid fears of a wider conflict in the Middle East, and escalating trade tensions between China and the United States. Former US President Donald Trump recently threatened to impose a 55 percent tariff on Chinese goods, prompting a muted response from Chinese officials who questioned the relevance of the existing trade agreements.

Commodity outlook and technical levels

According to Rahul Kalantri, Vice President of Commodities at Mehta Equities,
We expect crude oil prices to remain volatile throughout the session. On the international front, Brent crude faces support at 70.40 to 68.50 dollars and resistance at 74.00 to 75.20 dollars per barrel. In Indian markets, the support zone is at Rs 5,690 to Rs 5,630, while resistance is at Rs 6,200 to Rs 6,450.

Such high oil prices are expected to stoke inflationary pressures and increase the import bill for India, which is already running a high current account deficit.

India VIX spikes sharply

Reflecting the uncertainty, India VIX, the volatility index that measures investor fear, surged 7.95 percent to 15.13, according to NSE data. A rising VIX typically indicates growing risk aversion among investors, and the sharp uptick suggests that more volatility could be in store in the near term.

Conclusion

Today’s market decline underscores how vulnerable Indian markets are to geopolitical developments, especially when combined with commodity price shocks and foreign investor exits. Despite the RBI’s supportive measures, investor caution remains elevated, and the near-term outlook hinges on further developments in the Middle East and global crude supply chains.

Investors are advised to tread cautiously, monitor macro trends, and maintain a balanced portfolio in light of the prevailing uncertainties.

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