Sensex, Nifty log worst day in 2 weeks as Mideast tensions spike crude prices
- Sensex tumbled over 400 points in early trade, Nifty slipped below 24,100.
- HDFC Bank and SBI were among the biggest drags on the indices.
- Rising crude oil prices and geopolitical risks hit market sentiment.
- Pharma stocks fell on a new US tariff plan proposed by Donald Trump.
- This was the third consecutive day of decline for the benchmarks.
Markets bleed as crude spike rattles investors
Indian equity benchmarks suffered their steepest single-day fall in two weeks on Wednesday, as an escalating conflict in the Middle East sent crude oil prices soaring. The Sensex tumbled over 400 points in early trade, while the Nifty slipped below the 24,100 mark.
This was the third straight session of losses for both indices. Market breadth was negative, with banking stocks leading the slide. HDFC Bank and State Bank of India were among the top drags.
Rising crude oil prices have revived fears of imported inflation, which could force the Reserve Bank of India to keep interest rates higher for longer. Brent crude hovered near $85 a barrel during the session.
Bank stocks, pharma under pressure
Selling pressure was most acute in the banking and financial services sector. The Nifty Bank index dropped sharply, reflecting a broad risk-off mood among traders. Analysts said the surge in oil prices could widen India's trade deficit and weaken the rupee.
Adding to the gloom, pharmaceutical stocks came under fire after reports emerged that former US President Donald Trump had proposed a new tariff plan targeting imported medicines. The development hit shares of major drug exporters, compounding the day's losses.
The broader market also felt the heat. Midcap and smallcap indices fell in tandem with the benchmarks, though their declines were relatively shallower.
Geopolitical uncertainty clouds outlook
The widening conflict in West Asia has unnerved global markets. Investors are pricing in the risk of supply disruptions from the oil-rich region. India, which imports over 80% of its crude oil requirements, is particularly vulnerable to such shocks.
Foreign portfolio investors remained net sellers during the session, adding to domestic selling pressure. Volatility index India VIX rose, indicating heightened anxiety among traders.
Market participants are now watching for any signs of de-escalation. Hopes of a diplomatic resolution have faded in recent days, keeping risk appetite in check.
What to watch: Trading in the next session will hinge on overnight crude oil prices and any fresh geopolitical headlines. A sustained spike in oil could trigger further selling, especially in rate-sensitive sectors like banking and auto.