Israel-Iran conflict jolts markets: Sensex drops 1%, Brent crude surges 7.4%

Israel's surprise military strikes on Iran's nuclear and missile facilities on June 13, 2025, sent shockwaves through global financial markets, triggering a sharp sell-off in equities and a surge in oil prices.

The 30-share BSE Sensex in India dropped nearly 1%, falling 573.38 points to settle at 81,118.60, reflecting investor anxiety over escalating Middle East tensions. The NSE Nifty50 also declined, with futures indicating a gap-down opening.

"This is a flight-to-safety event," said James Rossiter, Head of Global Macro Strategy at TD Securities, London. "Markets are struggling a bit and in the fixed income space you have an oil-price shock that is inflationary and so you should see markets expecting an even more hawkish Fed."

Brent crude oil prices surged 7.44% to $74.52 a barrel amid fears that the conflict could disrupt supply from the oil-rich Middle East. Analysts warn that if tensions persist, prices could rise above $82-85, with worst-case scenarios pushing prices to $120 per barrel.

Naveen Vyas, Senior Vice President at Anand Rathi Global Finance, noted, "Since India relies on imports for over 80% of its crude oil needs, a conflict between Iran and Israel could lead to a spike in Brent crude prices."

U.S. stock futures fell 1.5%, with the Dow Jones Industrial Average dropping 606 points (1.4%), the S&P 500 down 0.9%, and Nasdaq 100 futures losing 1%. Safe-haven assets like gold rallied, with spot gold rising to $3,417.10.

The strikes targeted Iran's nuclear facilities, missile factories, and military commanders, marking a significant escalation. Iran vowed retaliation, raising concerns of a prolonged conflict that could further destabilize markets.

Vinod Nair, Head of Research at Geojit Investments, said, "Market sentiment was notably impacted by heightened geopolitical tensions following Israel’s military strike on Iran, which significantly increased risk aversion among investors."

The conflict's economic implications extend beyond oil prices, potentially affecting inflation and global supply chains. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, warned, "The economic consequences of this Israeli strike can be profound if the attack and counter attack by Iran lingers long."

Investors remain cautious as the situation develops, with markets on high alert for Iran's response and potential further disruptions to energy supplies.

Israel's military strikes on Iran's nuclear and missile sites triggered a 1% drop in India's Sensex and a 7.4% surge in Brent crude oil prices amid fears of supply disruptions. Global markets tumbled, with U.S. stocks falling and safe-haven assets like gold rising sharply.