Sensex, Nifty Slip into Red as Gulf Crisis Keeps Markets on Edge; BJP Win Offers Silver Lining

Mumbai, May 5: Indian equity markets opened Tuesday on a cautious note, with both benchmark indices trading marginally lower in early deals as investors weighed the escalating conflict in the Middle East against a buoyant domestic political development.

The BSE Sensex was down 237.93 points, or 0.31%, trading at 77,031.47, while the Nifty 50 slipped 84.65 points, or 0.35%, to 24,034.65 as of 9:23 AM — a muted, risk-off start to the week’s second session. The broader mood reflected a market caught between two forces: The continued geopolitical turbulence in the Strait of Hormuz and the cheering optics of the BJP’s landslide win in West Bengal assembly elections, the results of which came out on Monday. With Asian markets showing a broadly positive tone, this morning and crude oil prices remaining the key wildcard, the session promises to be one of cautious optimism fighting off global headwinds.

Movers in Morning trade

Among Nifty gainers in early trade, Infosys led the pack with a gain of 1.35%, trading at ₹1,184.20, followed by TCS, which was up 0.97% at ₹2,455. Tech Mahindra added 0.77% to trade at ₹1,482.90, Wipro edged up 0.67% to ₹202.10, and ITC rose 0.58% to ₹312.90. On the losing side, Shriram Finance emerged as the top laggard, falling 2.03% to ₹941, while Maruti Suzuki shed 1.36% to ₹13,395. Bajaj Finance slipped 1.11% to ₹939.70, ICICI Bank dropped 0.99% to ₹1,258.20, and Bajaj Finserv was down 0.97% at ₹1,753.30.

Broad And Sectoral Markets

In the broader markets, the Nifty Smallcap 100 was marginally in the green, up 0.01% at 18,134.30, while the Nifty Midsmall Healthcare index was also holding steady with a fractional gain of 0.02%, suggesting some pockets of resilience in the mid-and-small space. On the losing side, the Nifty Midcap 100 was down 0.16% at 60,063.05, and the Nifty Midcap 150 was off 0.17% at 22,118.40, reflecting mild selling pressure across the mid-market segment.

On the sectoral front, IT was the standout gainer, up a sharp 0.92% at 29,342.65, with FMCG also rising 0.32% and Media adding 0.33% — all pointing to defensive positioning by investors. In contrast, the Nifty Financial Services index was the key drag, down 0.69%, with Private Bank and Bank Nifty also bleeding — off 0.63% and 0.57% respectively — suggesting continued wariness around rate-sensitive financial stocks.

Middle East Conflict

The primary cloud over markets remains the rapidly deteriorating situation in the Strait of Hormuz. The U.S. and Iran launched fresh volleys of missiles and drones on Monday in what has become a de facto dual maritime blockade of the world’s most critical energy trade chokepoint — a waterway that has been virtually shut since the U.S. and Israel began attacks on Iran in February. President Donald Trump’s new naval effort, dubbed “Project Freedom,” aimed at escorting stranded merchant ships through the strait, appeared to backfire on day one — drawing fierce Iranian retaliation including drone attacks on UAE oil infrastructure and the destruction of several vessels in the Gulf. Iran’s Islamic Revolutionary Guard Corps has made clear that any passage through the strait requires its permission. Major shipping companies said they would hold off on transiting the strait until a formal end to hostilities is agreed, dashing hopes of an immediate reopening.

Domestic Factor: BJP’s Bengal Sweep

The major domestic catalyst that could temper the market’s downside is the BJP’s commanding performance in West Bengal’s assembly election results, which came out on Monday. Markets have historically responded positively to Narendra Modi-led BJP victories, reading them as a signal of policy continuity and political stability at the Centre. While it is unlikely to be a market-mover of the magnitude that macroeconomic or global triggers are, the result adds a layer of sentimental support — particularly for infrastructure, capital expenditure, and public sector-linked stocks that tend to rally on political stability signals.

Asian And US Markets

Asian markets were broadly in the green Tuesday morning, with the Nikkei 225 adding 0.38% and the Hang Seng marginally lower but stabilising after Monday’s losses, while the KSE 100 and Jakarta Composite were both trading positively. US markets, by contrast, closed Monday firmly in the red — the Dow Jones Industrial Average dropped 1.13% to 48,941.90, the S&P 500 fell 0.41% to 7,200.75, and the Nasdaq shed 0.19% to 25,067.80 — a broadly risk-off close driven by Gulf escalation fears.

Oil: The Number That Matters

Crude oil surged sharply on Monday as Iran intensified its attacks on the UAE and Gulf shipping lanes, marking the most serious escalation since the U.S.-Iran ceasefire came into force in early April. Brent crude futures settled at $114.44 per barrel, up $6.27 or 5.8%, while U.S. West Texas Intermediate rose $4.48, or 4.4%, to settle at $106.42 — both significant moves that place fresh inflationary pressure on import-heavy economies like India. Oil remains the single most important variable for Indian markets today: any further spike risks deepening the red, while any pullback — as seen Monday when “Project Freedom” briefly offered hope — could provide the relief rally the bulls are waiting for.

Monday’s Close: A Different Story

Monday’s session had ended on a relatively optimistic note, a sharp contrast to Tuesday’s cautious open. The Sensex closed at 77,269.40, up 355.90 points or 0.46%, while the Nifty 50 settled at 24,119.30, gaining 121.75 points or 0.51%. The session had begun strongly, riding positive Asian cues and a temporary pullback in crude oil prices, with autos, FMCG, and select financials leading the charge. The rally, however, ran out of steam in the second half as profit-booking kicked in amid global uncertainty. Kotak Mahindra Bank was Monday’s notable laggard, with concerns around return ratios weighing on the stock despite strong earnings, while Bharti Airtel, Dr. Reddy’s, ONGC, and TCS also ended lower. The midcap and smallcap segments managed modest gains, rounding off a session that showed underlying market strength — even if Tuesday is already testing it afresh.

Source:

• bseindia.com
• https://www.nseindia.com/market-data/top-gainers-losers
• https://www.nseindia.com/market-data/live-market-indices
• https://www.reuters.com/world/asia-pacific/trump-says-us-help-ships-stranded-strait-hormuz-tanker-hit-by-projectiles-2026-05-04/
• https://www.reuters.com/business/energy/oil-falls-after-trump-says-us-would-help-free-ships-stranded-strait-hormuz-2026-05-03/
• https://www.thehindu.com/elections/west-bengal-assembly/west-bengal-election-results-2026-trinamool-ousted-as-bjp-sweeps-west-bengal/article70939323.ece