Markets Slide as Oil Tops $100, Sensex Falls 650 Points in Early Trade

Domestic equity markets came under pressure in early trade on Thursday, with benchmark indices falling sharply as rising crude oil prices and escalating West Asia tensions dampened investor sentiment.

At around 9:37 am, the Sensex was down 667.55 points or 0.85% at 77,848.94, while the Nifty 50 declined 176.85 points or 0.73% to 24,201.25.

The sharp decline in markets was largely driven by a spike in crude oil prices, with Brent crude climbing above $100 per barrel after Iran seized ships in the Strait of Hormuz and geopolitical tensions intensified.

The development has raised fresh concerns for India, which depends heavily on crude imports. Elevated oil prices can push up inflation, widen the current account deficit, weaken the rupee and impact corporate earnings.

According to Reuters, the US has stepped up its maritime blockade on Iran, while Tehran has responded with actions against ships in the region, raising fears of prolonged disruption in key global shipping routes.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said uncertainty has become the defining theme for markets. He noted that Brent crude rising towards $103 increases risks to India's macroeconomic outlook, especially if prices remain elevated for an extended period. He added that while US markets remain resilient due to their status as a net energy exporter, the situation is more challenging for import-dependent economies like India.

Banks, IT Lead Market Decline

Selling pressure was visible across key heavyweight sectors including banking, financials, IT and automobiles.

Among Nifty stocks, Tech Mahindra declined 2.64%, Mahindra & Mahindra fell 2.14%, Eternal dropped 2.20% and ICICI Bank slipped 1.51%. IT majors such as Infosys and HCL Technologies also traded lower, dragging the indices.

Banking stocks remained under pressure amid continued foreign institutional investor selling. HDFC Bank declined 0.83%, while State Bank of India slipped 0.51%.

Foreign investors have been heavy sellers in financial stocks, offloading nearly ₹60,000 crore during the March quarter, with HDFC Bank and ICICI Bank accounting for a significant share of the outflows. Despite this, both banks have reported stable earnings, steady credit growth and strong balance sheets, indicating underlying resilience.

Rupee Weakens, Broader Market Shows Relative Strength

The Indian rupee weakened further, opening 20 paise lower at ₹94 against the dollar, marking the fourth consecutive session of decline as rising crude prices added pressure.

Despite weakness in frontline indices, a notable trend has been the relative outperformance of the broader market, where FII selling pressure has been limited. Vijayakumar pointed out that foreign investors have continued selective buying in mid and smallcap stocks, which may support this segment going forward.

He added that in the current environment, markets are likely to remain highly volatile and news-driven, with stock-specific movements influenced by earnings and sectoral developments.