Indian markets fell sharply on Monday after Prime Minister Narendra Modi called on citizens to conserve fuel, cut imports, and reduce gold purchases, a signal that rising energy costs are beginning to stress India's external finances. The Nifty 50 dropped 1.49% to 23,815.85 and the BSE Sensex lost 1.7% to close at 76,015.28.

The rupee hit a record closing low of 95.31 per dollar, falling roughly 0.9%, its steepest single-day drop since March 27. A weak rupee makes oil imports more expensive, which deepens the pressure on India's foreign exchange reserves and widens the current account deficit.

Oil Prices Add to the Pain

Brent crude jumped more than 2.6% to around $104 a barrel after US President Donald Trump on Sunday called the Iranian response to Washington's peace proposal "unacceptable." That geopolitical flare-up matters directly to India, which is the world's third-largest oil importer. The government had already said late last month that it had no plans to raise pump prices for diesel or petrol, meaning state-run oil companies are absorbing the cost gap rather than passing it to consumers.

Arun Kejriwal of Kejriwal Research and Investment Services described the market sell-off as a "knee-jerk reaction" to Modi's remarks, but pointed to a bigger structural concern: crude stubbornly holding above $100 despite ongoing Iran-US diplomacy. That persistent price floor, he said, will continue to weigh on sentiment.

Sector and Stock Damage

Thirteen of 16 major sectors closed in the red. Oil marketing companies Indian Oil, BPCL, and HPCL fell between 2.3% and 3%, squeezed between high input costs and capped retail prices. Index heavyweight Reliance Industries lost 3.3%. Travel and hospitality stocks took a hit from both the fuel outlook and Modi's austerity tone, IndiGo dropped 4.9%, while Indian Hotels, Lemon Tree, Chalet Hotels, Thomas Cook, and Yatra Online fell between 1% and 4.5%.

Jewellery stocks were among the hardest hit, directly responding to Modi's call to reduce gold purchases. Titan lost 6.7%, Kalyan Jewellers dropped 8%, and Senco Gold fell as much as 9.3%. State Bank of India slid 4.5%, extending a decline after missing its quarterly profit forecast, pulling the broader PSU bank index down 2.5%.

Not everything fell. Hyundai Motor India rose 2.8% after reporting a smaller-than-expected drop in quarterly profit. Agro-chemicals firm UPL gained 3.6% on a profit increase. Small-caps and mid-caps each declined about 1.5%, suggesting the damage was broad but not uniform.

The key variables to watch: whether Brent crude retreats below $100, how long the government holds the line on domestic fuel prices, and whether the rupee stabilises or extends its record-low slide.