Sensex Drops 600 Points, Nifty Slips Below 24,250 As US-Iran Tensions Hit Markets

Indian benchmark indices opened sharply lower on Wednesday as renewed tensions between the US and Iran triggered a spike in crude oil prices, denting investor sentiment and prompting broad-based selling across sectors. Rising global uncertainty and weak cues from Asian markets further weighed on domestic equities.

At around 9:35 a.m., the Sensex was down 591.29 points, or 0.76%, at 77,589.43, while the Nifty 50 fell 180 points, or 0.74%, to 24,218.70. All Nifty sectoral indices traded in the red except Pharma.

Among Nifty constituents, Dr Reddy's Laboratories, ONGC, Cipla, Sun Pharma and Max Healthcare bucked the broader weakness. Dr Reddy's gained 1.67%, while ONGC rose 0.87% as higher crude oil prices boosted sentiment for upstream energy companies.

On the losing side, Shriram Finance declined 2.34%, followed by InterGlobe Aviation, which fell 2.01% as higher aviation fuel costs weighed on the stock. Asian Paints, Bajaj Finance and Eicher Motors also traded more than 1% lower.

Crude Oil Spike And Geopolitical Tensions

Investor sentiment turned cautious after fresh geopolitical tensions erupted in the Middle East.

According to reports, the US military launched strikes against Iran after Tehran allegedly targeted ships in the Strait of Hormuz. Iran reportedly retaliated with strikes aimed at Bahrain and Kuwait, raising fears of further escalation in the region.

The renewed conflict pushed Brent crude prices up 2.6% to around $76.1 per barrel, extending the previous session's gains. Higher oil prices are seen as a negative for India, one of the world's largest crude importers, as they could increase inflationary pressures and widen the current account deficit.

Market volatility also increased, with India VIX, the market's fear gauge, rising more than 7% to 12.47, indicating growing uncertainty among investors.

Global Weakness Adds To Pressure

Global cues also remained unsupportive. US markets ended lower overnight after semiconductor stocks came under pressure following Samsung's earnings update and reports that Chinese AI startup DeepSeek is developing its own AI chip.

The weakness spilled over into Asia, with South Korea's Kospi declining sharply amid concerns over AI-related chip stocks. Regional regulators also stepped in to monitor heightened market volatility.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the renewed US-Iran tensions have pushed markets back into uncertain territory after improving macroeconomic conditions and renewed foreign institutional investor (FII) buying had started supporting sentiment.

He noted that while the recent spike in crude oil prices poses a near-term risk for India, sustained FII buying remains an encouraging development. FIIs have purchased equities worth nearly ₹1,991 crore over the past three trading sessions, indicating a gradual shift in global capital flows towards India.

According to Vijayakumar, weakening sentiment in global semiconductor stocks and concentration risks in markets such as South Korea and Taiwan are prompting foreign investors to look at relatively stable markets like India. However, he cautioned that the sustainability of these inflows will depend on whether tensions in the Middle East escalate further and keep crude oil prices elevated.