Indian shares decline to two-month lows on oil spike, Asia selloff

Indian shares fell on Monday, tracking a sharp selloff across Asian markets, while crude prices spiked due to an escalation of the Middle East conflict.

Brent crude rose 4.3% to $97 a barrel as fresh Israeli strikes on Iran and Lebanon fuelled fears of wider conflict and oil supply disruptions.

India’s benchmark Nifty 50 fell 1.04% to 23,123 and the BSE Sensex shed 0.97% to 73,524.26, with both the blue-chip indexes closing at two-month lows.

Fifteen of the 16 major sectors declined, with high-weightage financials and IT losing 1% and 1.2%, respectively.

The broader small-caps and mid-caps declined about 1.9% and 1.4%, respectively.

The MSCI Asia ex-Japan index tumbled 3.5%, while South Korea’s KOSPI fell 8.3% and Japan’s Nikkei lost 3.9%, led by declines in AI-linked stocks after recent blistering rallies.

Sentiment was weighed down by “a sharp selloff in technology, semiconductor and AI-linked stocks, along with elevated crude prices amid the Middle East conflict,” said Rajesh Palviya, head of research at Axis Direct.

Rising expectations of a U.S. interest rate hike by 2026-end, after a stronger-than-expected May jobs report, also weighed on markets.

“The data has reignited concerns that the Federal Reserve could maintain a hawkish stance for longer, resulting in higher bond yields and renewed risk aversion across global equities,” Palviya said.

India unveiled measures on Friday to support the battered rupee as costly oil and record foreign outflows after the Iran war strained the economy.

Among shares, Wipro slid 8.4% to a three-year low after its buyback record date and global technology rout.

InterGlobe Aviation fell 2.7% after Bloomberg News reported the carrier is unlikely to receive the full batch of nine Airbus A321XLR units this year.