Mumbai, May 11 (IANS) Indian equity markets traded cautiously on Monday, with benchmark indices falling 1 per cent each in early trade after the US and Iran failed to reach an agreement on a peace proposal related to the West Asia conflict.

Sensex declined as much as 943 points or 1.22 per cent to hit an intraday low of 76,384 in morning trade, while Nifty fell 280 points or 1.15 per cent to 23,897.

Sectorally, all indices traded in the red, with Nifty Consumer Durables, Nifty Auto, Nifty PSU Bank, Nifty Private Bank, Nifty Oil & Gas and Nifty Chemicals falling up to nearly 3 per cent.

Among Nifty stocks, Titan, IndiGo, M&M, Shriram Finance, Eternal, Maruti Suzuki, Bajaj Auto, Bajaj Finserv, Bharti Airtel, HDFC Life, Eicher Motors and Dr Reddy’s Laboratories were among the top laggards.

Moreover, India VIX — the market volatility gauge — rose nearly 2 per cent to 10.7.

Earlier in the session, the Sensex opened at 76,638.09, down 690.10 points or 0.89 per cent. Similarly, the 50-scrip basket opened nearly 200 points lower or 0.85 per cent down at 23,970.10.

According to a market expert, equities are likely to face pressure from two major headwinds on Monday.

“One, hopes of a resolution to the West Asia crisis have faded again following President Trump’s rejection of Iran’s response. Consequently, Brent crude has surged to $105, potentially worsening the current account deficit,” the expert said.

The expert further noted that Prime Minister Narendra Modi’s appeal to curb the consumption of fuel, gold, chemical fertilisers and edible oil, while discouraging avoidable foreign travel, reflects a crisis-management response to rising pressure on the current account deficit due to elevated crude prices.

“This call for austerity carries slightly negative implications for economic growth in FY27. Industries linked to petroleum, fertilisers, gold, aviation, hotels and related sectors are likely to face sentiment-driven pressure. Defensive sectors such as pharmaceuticals may remain resilient,” the expert added.

US President Donald Trump, on a social media platform, said, “I have just read the response from Iran’s so-called ‘Representatives.’ I don’t like it — TOTALLY UNACCEPTABLE! Thank you for your attention to this matter.”

Hopes of an imminent resolution to the 10-week-long US-Iran conflict — which could have reopened oil transit through the Strait of Hormuz — faded after Trump’s remark.

In commodities, Brent crude rose 4.41 per cent to $105.76 per barrel, while US West Texas Intermediate (WTI) gained 5.12 per cent to $100.31 per barrel.

Meanwhile, Asian markets traded mixed. Japan’s Nikkei and Hong Kong’s Hang Seng were down 0.3 per cent each, while South Korea’s KOSPI rose over 4 per cent.

–IANS

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