Sensex Sinks 1,300 Points, Rupee at Record Low as Iran Peace Talks Collapse

Indian financial markets took a severe beating on Monday as the collapse of US-Iran peace talks sent crude oil prices soaring and rattled investor confidence across the board. The BSE Sensex plummeted 1,313 points , or 1.70 per cent , to close at 76,015.28 , marking its third consecutive session of losses and a cumulative fall of nearly 1,950 points in just three trading days. The NSE Nifty shed 360 points to end at 23,815.85 , slipping below the crucial 24,000 mark .

The immediate trigger was US President Donald Trump's outright rejection of Iran's counterproposal to end the 10-week war in the Middle East, which he called "totally unacceptable" in a Truth Social post. Iran had submitted its proposal through Pakistani mediators, calling for lifting of US sanctions on Iranian oil sales, an end to the naval blockade, and a cessation of hostilities on all fronts. Tehran, in turn, vowed it would never bow to Washington's demands.

Oil prices surged sharply in response, with Brent crude climbing nearly 4 per cent to around $105 a barrel , as the Strait of Hormuz remained largely closed, keeping the global market tight. The blockade of the strait, through which approximately 20 per cent of seaborne crude oil and LNG exports pass, has kept energy supply deeply constrained since early March.

Adding to market anxiety, Prime Minister Narendra Modi urged citizens to cut fuel use, postpone gold purchases and foreign travel, and conserve foreign exchange amid rising oil prices. India spent $174.9 billion on crude imports last year, highlighting its dependence on energy imports. Shares of Titan fell nearly 7 per cent , while IndiGo also declined sharply.

The rupee crashed 82 paise to close at a record low of 95.31 against the US dollar , battered by surging crude prices, a strengthening dollar index above 98 , and heavy foreign institutional outflows. FIIs had already offloaded equities worth Rs 4,110 crore on Friday. India's forex reserves also fell by $7.79 billion to $690.69 billion in the week ended May 1.

Markets are now turning their attention to Trump's scheduled visit to Beijing on Wednesday, where discussions with President Xi Jinping are expected to include whether China can use its influence over Tehran to reopen the Strait of Hormuz . Until a diplomatic breakthrough materialises, analysts warn that pressure on Indian markets, the rupee, and the current account deficit is likely to persist.