Equity benchmark indices traded lower in early session on May 18 as oil prices rose after a drone attack on the Barakah nuclear power plant in the United Arab Emirates (UAE), raising concerns that tensions in the region could worsen further.
At 9:50 AM, the Nifty 50 fell as much as 326.40 points, or 1.38 per cent, to 23,317.10, while the Sensex plunged 1,057.73 points, or 1.40 per cent, to the day's low at 74,180.26.
Investors remained cautious amid fears that further escalation in West Asia could disrupt global oil supplies and keep crude prices high.
UAE officials said they were investigating the drone strike on the Barakah nuclear power plant and warned that the country reserved the right to respond to such attacks. Meanwhile, Saudi Arabia said it intercepted three drones entering from Iraqi airspace and said it would take necessary steps to protect its sovereignty and security.
India strongly condemned the drone attack on the Barakah nuclear power plant in the UAE, calling it a “dangerous escalation”, and urged all sides to return to dialogue and diplomacy amid rising tensions in the region.
In a statement issued on Monday, the Ministry of External Affairs said, “India is deeply concerned at the attack targeting the Barakah nuclear facility in the UAE. Such actions are unacceptable and represent a dangerous escalation. We urgently call for restraint and a return to dialogue and diplomacy.”
The broader market also witnessed intense selling pressure. Market breadth remained decisively weak, with 2,541 stocks declining against just 440 advances on the NSE. Data showed 55 stocks hitting their 52-week lows, while 120 counters were locked in lower circuits. In contrast, only 40 stocks touched 52-week highs and 39 stocks hit upper circuits.
Barring IT, all sectoral indices were in red. Nifty Consumer Durables was the top sectoral loser, falling nearly 3.50 per cent, while Nifty PSU Bank, Nifty Realty, and Nifty Media fell more than 2 per cent each. Nifty Auto, Nifty Financial Services, and Nifty Oil & Gas were down between 1 per cent and 2 per cent. Pharma, FMCG and Healthcare were also in the negative zone.
The Nifty Midcap 100 was down about 1.50 per cent and the Nifty Smallcap 100 was lower by more than 2 per cent. Nifty 500, which represents about 92 per cent of the free float market capitalisation of the stocks listed on the National Stock Exchange (NSE), was also down by about 1.30 per cent.
Trump's Warning To Iran Adds Fresh Pressure
US President Donald Trump's warning to Iran to act quickly on stalled negotiations, saying time is running out, further dampened the sentiment.
“For Iran, the Clock is Ticking, and they better get moving, FAST, or there won’t be anything left of them. TIME IS OF THE ESSENCE!” Trump wrote in a post on Truth Social.
According to reports, the US has asked Iran to hand over nearly 400 kilograms of enriched uranium and limit nuclear operations to just one facility. Washington also wants Iran to drop its demand for compensation related to the conflict. Reports further said the US does not want to unfreeze most Iranian assets immediately and wants the conflict to end only after negotiations are completed.
Iran, meanwhile, has set its own conditions for restarting talks. Tehran wants military action in the region to stop and sanctions to be lifted. It has also demanded the release of frozen assets, compensation for war-related damage and recognition of its control over the Strait of Hormuz.
The escalating tensions fuelled concerns over potential disruption in crude oil supplies, putting pressure on equity markets globally, including India.
The international benchmark Brent crude oil futures rose up to 2.43 per cent to $112 a barrel, while the US oil benchmark West Texas Intermediate (WTI) crude oil futures jumped 3.30 per cent to $104.36 per barrel.
