Summary of this article
Trump ended Iran ceasefire, triggering fresh geopolitical tensions and market panic
Sensex and Nifty fell over 2 per cent; investors lost Rs 8.44 lakh crore
Rising crude oil prices raised concerns over inflation and India's import costs
Benchmark equity indices suffered a major sell-off on July 8, 2026, after US President Donald Trump declared that the ceasefire arrangement with Iran was effectively over, reigniting fears of a wider conflict in West Asia.
The Sensex slumped 1,677.12 points, or 2.15 per cent, to close at 76,503.60, while the Nifty50 fell 516.65 points, or 2.12 per cent, to settle at 23,882.05. The broad-based rout erased nearly Rs 8.44 lakh crore from investors' wealth as the market capitalisation of BSE-listed companies declined to Rs 471.23 lakh crore.
The sharp decline came as investors rushed to cut exposure to risk assets after Trump's remarks raised concerns that diplomatic efforts between Washington and Tehran had collapsed, potentially threatening global oil supplies and adding fresh uncertainty to financial markets.
Speaking ahead of a NATO summit in Ankara, Trump dismissed the prospect of further negotiations with Iran and indicated that the temporary ceasefire understanding had come to an end.
"To me, I think it's over. I don't want to deal with them."
He further said: "They are sick people. They are led by sick people."
Calling further engagement pointless, Trump added: "As far as I am concerned, it is just a waste of time dealing with them."
His comments came after the fresh US military air strikes on Iran, carried out just hours earlier. The attacks came days after Iran held a state funeral for Supreme Leader Ali Khamenei, who was killed in joint US-Israeli strikes on February 28. The latest escalation signalled a further deterioration in relations between the two countries after recent diplomatic efforts failed to produce a lasting agreement.
The interim arrangement, signed last month, had created a 60-day window for both countries to negotiate a permanent settlement. It also included commitments aimed at ensuring the safe movement of commercial vessels through the Strait of Hormuz, one of the world's most critical energy shipping routes. However, multiple rounds of indirect and technical negotiations ended without a breakthrough.
Adding to market worries, the US on July 7 revoked a temporary licence that had allowed Iran to continue selling crude oil despite existing sanctions. The waiver, originally valid through August 21, was withdrawn following reports of renewed tensions around the Strait of Hormuz. Iran has been given until July 17 to wind down related transactions.
The Strait of Hormuz remains a crucial passage for global crude exports. Any disruption to shipping through the route raises fears of tighter oil supplies and higher energy costs worldwide, factors that can fuel inflation and weigh on economic growth.
Those concerns were immediately reflected in crude oil prices. Brent crude surged as much as 6.85 per cent during today’s session, climbing above the $79-a-barrel mark before trading around $78 per barrel later in the day, up roughly 5.66 per cent from the previous close, as of the time of writing. The US West Texas Intermediate crude oil futures also gained as much as 6.88 per cent to the north of $75 a barrel. Both the benchmarks have risen around 9 per cent in two days.
The initial rally in oil came after reports emerged that the US military had struck more than 80 targets in Iran in response to attacks on three commercial vessels transiting the Strait of Hormuz.
Global equity markets also reacted negatively to Trump's remarks. Dow Jones Industrial Average futures fell 583 points, or about 1.10 per cent, indicating a sharply weaker opening for Wall Street.
Indian equities mirrored the global risk-off mood as investors factored in the possibility of prolonged geopolitical tensions, elevated crude prices and renewed inflationary pressures. Higher oil prices are particularly significant for India, world's third largest crude importer, as they can widen the country's import bill, pressure the rupee and squeeze corporate profit margins.
The combination of geopolitical uncertainty, surging energy prices and concerns over global economic stability triggered widespread selling across sectors, making July 8 one of the weakest trading sessions for Dalal Street in recent months.
All the sectoral indices ended in the red. Nifty Auto, Nifty Bank, Nifty Financial Services, Nifty FMCG, Nifty PSU Bank, Nifty Private Bank, Nifty Oil & Gas, Nifty Media and Nifty Chemical, all ended more than 2 per cent lower.
InterGlobe Aviation and Jio Financial Services emerged as the biggest losers on the Nifty 50, tumbling over 5 per cent each. They were followed by Shriram Finance, Maruti Suzuki India, Hindustan Unilever, Tata Consumer Products, Max Healthcare and Bajaj Finance, which declined between 3 per cent and 5 per cent.
