Indian benchmark indices opened sharply lower on Wednesday as renewed military tensions between the United States and Iran rattled global markets and heightened concerns over inflation.
The BSE Sensex fell nearly 700 points in the opening minute, while the Nifty 50 dropped around 200 points, reflecting heightened risk aversion among investors.
In pre-opening trade, the Sensex was down more than 540 points at 76,397.24, while the Nifty declined more than 203 points to 23,852.05.
Only Sun Pharmaceutical Industries was trading in positive territory among the 30 Sensex companies in early trade.
Why is the stock market down today?
The sharp decline came after a fresh escalation in the Iran-US conflict, with both sides exchanging strikes overnight.
The developments triggered concerns about a prolonged disruption in the Middle East and its potential impact on global energy supplies. Investors also turned cautious amid fears that higher oil prices could fuel inflation and complicate interest-rate decisions.
Asian markets also came under pressure as investors assessed the implications of the conflict.
Brent crude jumps to nearly six-week high
Crude oil prices surged as markets reacted to the latest escalation.
Brent crude rose about 2% to $96.60 a barrel, reaching a near-six-week high. The rise in oil prices has renewed concerns for oil-importing economies such as India, where a sustained increase in crude prices can put pressure on inflation and the country’s import bill.
Higher energy prices could also weigh on corporate earnings and investor sentiment if the situation persists.
GIFT Nifty signals weak opening
The negative sentiment was visible even before the domestic market opened.
GIFT Nifty futures stood at 24,033.5 points at 7:38 am, signalling a weak start for the Nifty 50. The index had closed at 24,055.80 on Tuesday.
The previous session had already reflected caution among investors, with higher crude prices and renewed geopolitical tensions weighing on the market.
How did Sensex and Nifty close on Tuesday?
On Tuesday, the Sensex ended 12.99 points, or 0.02%, lower at 76,944.28. During the session, it slipped as much as 301.15 points to 76,656.12.
The Nifty 50 declined 24.60 points, or 0.10%, to close at 24,055.80. It touched an intraday low of 23,980.55.
The latest sell-off therefore comes after a relatively subdued previous session, with geopolitical uncertainty now adding fresh pressure to Indian equities.
What investors are watching
Markets are likely to closely track developments in the Iran-US conflict, movements in crude oil prices and signals from global central banks.
A prolonged rise in crude prices could increase inflationary pressures and affect expectations around interest rates, while further escalation in the Middle East could keep investors away from riskier assets.
For Indian equities, the combination of geopolitical uncertainty, rising crude prices and global risk aversion is likely to remain a key market theme in the near term.
