Mumbai: Indian equity markets ended sharply lower on Wednesday as rising geopolitical tensions linked to the Iran conflict rattled investor sentiment. Both the BSE Sensex and Nifty 50 witnessed heavy selling during the day, mainly dragged down by banking, financial and auto stocks.
After opening on a flat note, the markets gradually slipped into the red as fears of inflation and potential disruptions in global oil supply spooked investors.
Benchmarks End Deep in the Red
At the closing bell, the Sensex plunged 1,342.27 points, or 1.72%, to settle at 76,863.71. Meanwhile, the Nifty50 dropped 394.75 points, or 1.63%, to close at 23,866.85, slipping below the crucial 24,000 mark.
During intraday trading, the sell-off intensified with the Sensex falling as much as 1,396 points, while the Nifty touched a low of around 23,854.
The sharp decline also wiped out nearly ₹3 lakh crore from the total market capitalisation of companies listed on the Bombay Stock Exchange, bringing it down to around ₹442 lakh crore.
Auto and Banking Stocks Lead the Decline
Among sectoral indices, auto stocks suffered the biggest losses. The Nifty Auto index dropped nearly 2% during the session. Banking stocks also remained under pressure, with the Nifty Bank falling around 1.5%. Notably, 13 out of 14 constituents in the banking index traded in negative territory.
However, mid-cap and small-cap stocks performed relatively better compared to the benchmarks. The BSE MidCap index gained around 0.80%, while the BSE SmallCap index rose more than 1% during the trading session.
Global Tensions and Oil Prices Weigh on Markets
Investor sentiment remained cautious amid concerns that the ongoing conflict involving Iran could disrupt global oil supply routes. Reports of attacks on vessels in the Middle East raised fresh fears about shipping routes through the Strait of Hormuz, a crucial passage for global energy supplies.
Brent crude prices climbed nearly 1.8% to trade just below $90 per barrel after falling sharply in the previous session. Oil price volatility has been driving uncertainty in global markets as investors worry about prolonged disruptions to energy supplies.
Global Markets Show Mixed Trend
Global markets presented a mixed picture. European equities weakened, with the Stoxx Europe 600 declining nearly 0.9%. US stock futures remained largely flat as investors awaited key inflation data for clues about future policy decisions.
In contrast, Asian markets showed some resilience. The MSCI Asia Pacific Index rose around 0.9%, while the MSCI Emerging Markets Index gained approximately 0.8%.
Market analysts say investors are likely to remain cautious in the near term as geopolitical tensions and fluctuations in crude oil prices continue to influence global financial markets.
