Indian stock markets, including the Sensex and Nifty, experienced a downturn, ending a two-day rally, as escalating US-Iran tensions led to a sharp increase in crude oil prices, sparking concerns over inflation and fiscal stability for oil-importing nations like India.
Photograph: Arko Datta/Reuters
Key Points
- Indian benchmark indices Sensex and Nifty ended lower, breaking a two-day winning streak.
- The decline was primarily driven by a significant spike in Brent crude oil prices, which climbed 2.93 per cent to USD 98.96 per barrel.
- Reports of fresh US military operations in southern Iran disrupted hopes of a de-escalation in West Asia, triggering aggressive risk-off positioning globally.
- For oil-import-dependent economies like India, rising crude prices revive concerns about imported inflation, currency pressure, and widening fiscal stress.
- Foreign Institutional Investors (FIIs) remained net buyers, purchasing equities worth Rs 821.75 crore on Monday.
Market benchmark indices Sensex and Nifty ended lower in a volatile trade on Tuesday following a spike in crude oil prices amid reports of fresh US military operations in southern Iran.
The 30-share BSE Sensex declined 479.26 points, or 0.63 per cent, to settle at 76,009.70.
During the day, it tanked 579.28 points, or 0.75 per cent, to 75,909.68.
The 50-share NSE Nifty dropped 118 points, or 0.49 per cent, to end at 23,913.70.
Market Movers and Global Cues
From the Sensex firms, Bharti Airtel, Trent, Tata Consultancy Services, Bajaj Finance, Titan and HDFC Bank were among the biggest laggards.
In contrast, Tech Mahindra, Eternal, Maruti and Adani Ports were among the winners.
Brent crude, the global oil benchmark, climbed 2.93 per cent to $98.96 per barrel.
US President Donald Trump on Monday said negotiations with Iran to end the war were progressing “nicely”, but officials pointed out that a final decision may take some time due to the complex communication networks Tehran deploys to consult with its supreme leader.
“Markets initially traded with a stable undertone amid easing crude oil prices and supportive global cues.
“However, sentiment deteriorated sharply after reports of fresh US military strikes in Iran disrupted hopes of a near-term de-escalation in West Asia.
“The sudden shift in geopolitical sentiment triggered aggressive risk-off positioning across global markets and reignited fears of renewed energy supply disruptions,” Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.
Impact on Indian Equities
The sharp rebound in Brent crude prices once again became a key pressure point for Indian equities, he added.
“For an oil-import-dependent economy like India, rising crude prices immediately revive concerns around imported inflation, currency pressure, and widening fiscal stress,” Hariprasad added.
In Asian markets, South Korea’s benchmark Kospi ended higher, while Japan’s Nikkei, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng settled lower.
“Near-term optimism around a potential US-Iran peace deal faded sharply following reports of US military operations in southern Iran, triggering a spike in crude prices and reversing the rupee’s brief appreciation,” Vinod Nair, head of research, Geojit Investments Limited, said.
Foreign Institutional Investors (FIIs) bought equities worth Rs 821.75 crore on Monday, according to exchange data.
