Benchmark stock indices Sensex and Nifty fell over 1 per cent each due to five key reasons, including a 5 per cent surge in crude oil prices, US President Donald Trump rejecting Iran's response to the US peace plan, and the Prime Minister Narendra Modi calling for austerity measures. Persistent foreign outflows and news flows related to quarterly earnings also added to the sentiment. 

The BSE Sensex stood at 76,321.62, down 1,004 points or 1.3 per cent. The NSE barometer Nifty was quoting at 23,899.35, down 276.80 points or 1.14 per cent.

VK Vijayakumar, Chief Investment Strategist, Geojit Investments said the market faced pressure, as  the expected resolution of the West Asia crisis has again slipped away following President Trump’s rejection of Iran’s letter. "Consequently Brent crude has again spiked to $105 potentially aggravating the current account deficit," he said.

Besides, he noted that PM Modi’s appeal to the nation to curb the consumption of petrol and diesel, gold, chemical fertilisers and edible oil and refrain from avoidable foreign travel is a crisis management response to the current account deficit problem caused by high crude prices. 

"This call for austerity has slightly negative implication for economic growth in FY27. Particularly, the industries related to the austerity call like petroleum, chemical fertilisers, gold, air travel, hotel and related sectors will be sentimentally impacted. Sectors like pharmaceuticals which will not be impacted in any manner will remain resilient," he said.

Geopolitical concerns sent India's fear gauge India VIX, which suggests volatility in the market over the next 30 days, soaring 11.89 per cent to 18.84. Jewellery stocks including Titan Company Ltd, Kalyan Jewellers India Ltd and Senco Gold took a beating after PM Narendra Modi urged Indians to avoid buying gold for weddings for the next one year.

Addressing a public gathering in Hyderabad, PM Modi urged Indians to revive pandemic-era work-from-home habits — including virtual meetings and remote work — to reduce unnecessary commuting and fuel use. He appealed to citizens, especially families planning weddings and celebrations, to postpone gold purchases for at least one year in the national interest, and also asked Indians to defer non-essential foreign travel, including overseas vacations and destination weddings, Devarsh Vakil, Head of Prime Research at HDFC Securities noted.

"Rising crude oil prices and global instability are putting severe pressure on India's foreign exchange reserves, and reducing discretionary spending on gold imports and foreign travel could help the country conserve them," he said.

Vakil said equity futures for the US markets edged lower on Monday morning following a record-setting session on Friday. he said the market sentiment has also been tempered by the rejection of a peace proposal intended to end the ongoing conflict with Iran, fueling concerns that the Strait of Hormuz will remain closed.