Indian equities declined for a second consecutive session on Thursday, with the Nifty slipping into correction territory, as Iran’s continued attacks on ships across West Asia dampened hopes of an early end to the conflict. 

The escalation also raised concerns about a prolonged disruption to oil flows through the Strait of Hormuz. 

The Sensex ended the session at 76,034, down 829 points, or 1.08 per cent. The Nifty closed at 23,639, declining 228 points, or 1 per cent. 

Since the beginning of the conflict, the Sensex has fallen 6.5 per cent and the Nifty 6.1 per cent. From their all-time highs, the Sensex is down 11.4 per cent and the Nifty 10.2 per cent. A decline of 10 per cent from recent peaks is typically defined as a “correction”, a technical indicator signalling a phase of market weakness. 

The total market capitalisation of BSE-listed firms declined by ₹1.8 trillion to ₹440 trillion. 

Since the onset of the conflict, overall market capitalisation has eroded by ₹23.4 trillion. 

Brent crude once again touched $100 a barrel amid reports of Iran-linked attacks on oil-transport facilities in West Asia. 

News reports suggested that explosive-laden Iranian boats attacked and set ablaze two tankers in Iraqi waters on Thursday. Additional reports of vessels being struck across the region further rattled investor nerves.

Iran has warned it will block oil supplies through the Strait of Hormuz until US-Israel attacks cease. Meanwhile, Hezbollah — the Iran-backed militant group based in Lebanon — launched drones and rockets at northern Israel on Wednesday, prompting Israeli strikes on Beirut’s southern suburbs and southern Lebanon. The escalation has also raised fears that Yemen’s Houthis could join the conflict in support of Iran.

Elevated crude oil prices leave India economically vulnerable, as the country imports nearly 90 per cent of its crude oil and about half of its natural gas requirements. A prolonged conflict in West Asia could widen India’s current account deficit and stoke inflationary flames.

Reflecting the stress, the rupee hit a fresh intraday low of 92.37 before settling at 92.19 against the US dollar.

“Geopolitical tensions in West Asia continue to dampen global risk appetite. Fresh attacks on oil-shipping vessels have pushed crude prices closer to $100 per barrel, intensifying concerns over inflation and gas supply constraints,” said Vinod Nair, head of research at Geojit Investments.

“In the near term, sustained risk-off sentiment and continued foreign institutional investor outflows could keep equities and the rupee under pressure. However, India’s valuation premium has narrowed this year, making the market more attractive for long-term investors and limiting downside risks,” he added.

Market breadth remained weak, with 1,598 stocks advancing and 2,645 declining on the BSE.

“Going ahead, the 23,550-23,500 zone will act as a key support level for the index. A sustained move below 23,500 could trigger further downside towards 23,350. On the upside, 23,800-23,850 remains an immediate resistance zone, while a decisive breakout above 23,850 could lead to a pullback rally towards the 23,970-24,000 zone,” said Sudeep Shah, head of technical and derivatives research at SBI Securities.

Among Sensex constituents, ICICI Bank fell 2.2 per cent and was the biggest drag on the index.