Sensex Sheds 600 Points, Nifty Slips Below 23,900 as Iran-US Truce Hits Turbulence

Benchmark indices Sensex and Nifty fell in early trade on Thursday, giving back a portion of Wednesday's sharp gains as renewed tensions in West Asia cast doubt over the durability of the Iran-US ceasefire.

At around 10:35 am, the Sensex was trading 598.57 points or 0.77% lower at 76,964.33, while the Nifty dropped 141.10 points or 0.59% to 23,856.25. Larsen & Toubro, Mahindra & Mahindra, Infosys, and HDFC Bank were among the biggest losers.

Oil prices also edged higher, climbing to $97.35 per barrel after Iran accused the United States of violating the ceasefire, reversing Wednesday's dip to $95 per barrel, which had followed the announcement of a two-week truce between the two nations.

The mood soured further after Iran declared it would be "unreasonable" to continue talks with Washington, following what Lebanon described as the heaviest Israeli strikes on its territory to date.

Lebanon declared a national day of mourning after the wave of attacks reportedly killed at least 254 people and wounded more than 1,165 in a single day. Israeli Prime Minister Benjamin Netanyahu maintained that Lebanon was never part of the Iran-US ceasefire deal, a position backed by US Vice President JD Vance, who said bluntly, "We never made that promise."

US President Donald Trump, posting on social media, warned that "all US ships, aircraft, and military personnel" would remain positioned around Iran until a "real agreement" on the ceasefire "is fully complied with", cautioning that non-compliance could lead to further conflict.

Back home, market observers noted that Wednesday's 873-point Nifty rally had been driven by the ceasefire optimism and the accompanying drop in crude prices. Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the move was further supported by short-covering and buying in attractively valued financial stocks.

He noted that while the Reserve Bank of India's policy decision was broadly in line with expectations, with rates and stance left unchanged, the Governor's comment that "growth impulses remain strong supported by robust private consumption and sustained investment demand" offered a measure of reassurance to the market.

Looking ahead, Vijayakumar pointed to RBI's projections of 6.9% GDP growth and 4.6% inflation for FY27, which he said could translate to nominal GDP growth of around 11.5% and earnings growth of roughly 12%. "With fair valuations in the market now, if the West Asian ceasefire holds, the market will remain resilient," he said.

However, he flagged the escalation in Lebanon as a key risk, warning that a fresh spike in crude prices could put Wednesday's gains in jeopardy. His advice to investors was to maintain patience as "Fairly valued stocks depressed by FPI selling and shorting will bounce back at any time."