Sensex drops 550 points, Nifty slips below 24,250 as U.S.-Iran tensions lift oil prices; RIL, IndiGo, Asian Paints fall 2%

The Indian equity benchmarks witnessed bearish trade on Wednesday, tracking weak global cues as renewed geopolitical tensions in the Middle East pushed crude oil prices higher and dampened investor sentiment. The benchmark indices—the Sensex and the Nifty—declined by up to 0.75% in early trade, with all sectoral indices trading in negative territory, barring pharma and healthcare.

The BSE Sensex dropped 552 points, or 0.71%, to 77,628 in early trade, while the NSE Nifty50 declined 177 points, or 0.72%, to 24,222. The broader markets were relatively resilient, with the Nifty Midcap 100 slipping 0.32% and the Nifty Smallcap 100 declining 0.20%.

India VIX, the market's fear gauge, jumped nearly 7% to 12.43, indicating heightened volatility as investor sentiment turned cautious following fresh U.S. strikes on Iran.

The renewed conflict in West Asia reignited concerns over regional stability and the security of shipping through the Strait of Hormuz, raising fears of potential disruptions to global crude oil supplies. Brent crude climbed to around $75-76 per barrel, weighing on oil-importing economies such as India.

In overnight trade, Wall Street ended lower, with technology stocks leading the decline after a sharp sell-off in semiconductor names following Samsung's earnings update and reports of DeepSeek developing its own AI chip. Asian markets are mirroring the weakness, while Brent crude has edged higher to around $75 per barrel after renewed geopolitical tensions near the Strait of Hormuz, although expectations of adequate OPEC+ supply continue to limit the upside.

RIL, IndiGo, Asian Paints fall over 2%

In the Sensex pack, 25 out of 30 stocks were in the red zone, with Reliance Industries emerging as the top laggard. Shares of the country’s most valued stock fell over 2% amid the spike in Brent crude prices.

Among others, Asian Paints and InterGlobe also dropped over 2%, while Maruti Suzuki, Mahindra & Mahindra, Bajaj Finance, Hindustan Unilever and SBI lost over 1% each.

On the positive side, Sun Pharma led the gainers with a rise of over 1%, while HCLTech, Tech Mahindra, Power Grid, Infosys, and TCS also traded in the green.

Sectorally, selling pressure was visible across most indices. The Nifty Oil & Gas declined 1.71%, Auto fell 1.35%, PSU Bank lost 1.18% and FMCG dropped 1.06%. Realty, Financial Services and Media also traded lower. In contrast, defensive sectors outperformed, with Nifty Pharma gaining 0.93%, Healthcare rising 0.78% and IT edging up 0.21%.

Rising crude prices to keep market under pressure, says analyst

Rajesh Palviya, Head of Research at Axis Direct, said weakness in global markets and rising crude prices are likely to keep domestic equities under pressure.

"Stability in crude oil prices and a rebound in global semiconductor stocks will be crucial in determining whether domestic equities can regain their footing after the expected weak opening," he said.

Ponmudi R, CEO of Enrich Money, said geopolitical developments have once again shifted markets into a risk-off mode.

"Indian equity markets are likely to trade with a cautious bias after fresh U.S. strikes on Iran reignited geopolitical tensions following attacks on commercial vessels in the Strait of Hormuz. The renewed escalation has revived concerns over regional stability and global energy supplies, which could dampen investor sentiment, trigger a risk-off move, and lead to profit booking after the recent rally," he said.

He noted that crude prices have rebounded sharply from recent lows and are now trading in the $72-$73 per barrel range as markets factor in possible supply disruptions.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said markets have entered another phase of uncertainty due to rising geopolitical risks.

"With the renewed U.S.-Iran tensions and the consequent spike in Brent crude to $76, the market is again back to uncertain territory. The market was slowly gaining strength on positive FII activity and improving macro fundamentals. The renewed U.S.-Iran tensions have put a temporary question mark on this positive development. Therefore, investors have to wait and watch the developments," he said.

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