Indian equities plummeted, in line with a global retreat from risk assets, and the benchmark Sensex and Nifty posted their biggest fall in over three months as tensions between the US and Iran escalated, sending oil prices soaring while reigniting concerns over inflation.
The benchmark Sensex ended the session at 76,504, down 1,677 points, or 2.2 per cent, while the Nifty closed at 23,882, down 517 points, or 2.1 per cent.
Both indices posted their biggest decline since 30 March 2026. The total market capitalisation of BSE-listed firms declined by ₹9 trillion to ₹471 trillion.
Equity markets around the world fell after both Washington and Tehran effectively declared the interim peace agreement defunct. Fresh US military strikes on Iranian targets and Iran’s retaliatory strikes heightened fears that shipping through the Strait of Hormuz could come under threat, keeping energy markets on edge.
Brent crude prices gained 9 per cent over the past two days and were trading at $78.34. Elevated crude prices are a structural negative for India, a heavy importer of crude oil, and threaten to widen the current account deficit, weaken the rupee and erode corporate profits.
The benchmark indices of all major Asian equity markets, barring Hong Kong and Taiwan, ended the session in the red as investors pulled money out of risk assets.
The Nifty Bank and Nifty Financial Services indices declined 2.5 per cent each. The rupee fell 0.6 per cent against the US dollar to trade at 95.56.
“The renewed hostilities have brought back one of the market’s biggest concerns just as investors thought the situation was stabilising. The escalation has revived worries about India’s import bill, inflation and the broader macroeconomic outlook, which explains the sharp reaction. That said, markets have become accustomed to geopolitical flare-ups and are less likely to overreact unless the conflict escalates further. If there are no fresh attacks, particularly on shipping routes, and the situation does not deteriorate, investors could begin treating this as the new normal and focus on the likelihood that negotiations will continue in the background. In that scenario, today’s sharp sell-off could attract buying support tomorrow,” said UR Bhat, co-founder of Alphaniti Fintech.
Market breadth was weak, with 3,331 stocks declining and 971 advancing. Foreign portfolio investors were net buyers to the tune of ₹1,963 crore, while domestic institutional investors were net buyers worth ₹790 crore.
All Sensex constituents declined. HDFC Bank, which fell 2.3 per cent, was the biggest contributor to the Sensex’s decline, followed by ICICI Bank, which fell 2.4 per cent. Contribution to index movements depends on the weightage of an individual stock and the extent of its movement on a particular day.
“Going ahead, the immediate support for the Nifty is placed in the 23,780–23,750 zone. Any sustained move below this zone could extend the Nifty’s weakness towards 23,600, followed by 23,450 in the short term. On the upside, the immediate resistance is placed in the 24,020–24,050 zone,” said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.
