Sensex falls 1,700 points as Trump’s latest Iran outburst rattles global markets

3 min readMumbaiUpdated: Jul 8, 2026 04:12 PM IST

Sensex was down 0.75% at 77,592, while the broader NSE Nifty 50 declined 0.72% to 24,217.

The Indian stock markets fell over 2% on Wednesday as US President Donald Trump voided the peace deal in West Asia with Iran after both parties traded blows following a period of truce. The fall came after the stock markets had gained around 2.4% over the last week.

The fresh escalation caused crude oil prices to jump 6% to $79-$80 a barrel. This contributed to the rupee weakening 59 paise against the dollar, ending the session at 95.56.

The benchmark Sensex index closed the session down 1,677.12 points or 2.2% at 76,503.60. The National Stock Exchange’s benchmark Nifty 50 index lost 2.1% to end at 23,882.05. Both indices had opened the session around 1% lower but fell sharply more in afternoon trade after Trump’s announcement.

The situation in West Asia escalated after Iranian authorities attacked 3 commercial tankers in the Straight of Hormuz overnight. This led to Iran and the US trading blows before Trump announced on Wednesday morning that the interim peace deal between the two countries signed in Islamabad last month was over. “To me, I think it’s over. I don’t want to ⁠deal with them. As far as ⁠I’m concerned, it’s just a waste of time dealing with them,” Reuters reported Trump as saying in Ankara, Turkey.

Some stability in West Asia post the peace pact had led to a recovery in Indian markets, with early signs of foreign investors returning to the capital markets. Following a $5.2 billion sell-off by foreign institutional investors (FIIs) in the Indian stock markets last month, they had bought $401 million in shares so far this month as of Tuesday. However, they are expected to have heavily sold during the sell-off on Wednesday.

The sell-off was broad-based, with all sectoral indices seeing sharp losses. A host of sectors, including banking and financial services, FMCG, automobiles, and oil and gas, lost over 2%. The India VIX index, which indicates market volatility, skyrocketed 26% to 14.68.

Other global markets had also ended lower earlier. The US markets had lost over 1% overnight. In Asia, the South Korean market fell 5% for the second straight day as fears about the sustainability of the AI rally deepened despite the profits of market heavyweight Samsung jumping manifold. Japan’s Nikkei 225 index also fell 2%. Meanwhile, Taiwan’s TAIEX index gained 0.6%.