Stock Markets Slump Over 2 pc as Rising US-Iran Tensions, Spike in Oil Prices Dent Sentiment

Equity benchmark indices Sensex and Nifty tumbled over 2% on Wednesday after US President Donald Trump said the interim agreement with Iran is over, leading to a sharp rally in crude oil prices.

Besides, investors shifted to a risk-off mode following pre-earnings anxiety over sluggish first-quarter forecasts, traders said.

The 30-share BSE Sensex tanked 1,677.12 points, or 2.15%, to settle at 76,503.60. During the day, it plummeted 1,921.69 points, or 2.45%, to 76,259.03.

On similar lines, the 50-share NSE Nifty tumbled 516.65 points, or 2.12%, to end at 23,882.05.

All firms in the Sensex pack ended in the red. InterGlobe Aviation, Maruti, Hindustan Unilever, Bajaj Finance, Kotak Mahindra Bank and Mahindra & Mahindra were major laggards.

Brent crude, the global oil benchmark, jumped 6.18% to $78.74 per barrel.

"Indian equity markets witnessed a sharp sell-off as US President Donald Trump declared the interim peace deal with Iran is 'over' following Iranian attacks on commercial vessels in the Strait of Hormuz, reigniting geopolitical tensions and raising fresh concerns over global energy supplies," Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm.

The renewed escalation triggered a sharp rebound in crude oil prices, which surged nearly 7%, sending shockwaves across global financial markets, he added.

In Asian markets, South Korea's Kospi tumbled 5.35%, Japan's Nikkei 225 index declined 2.11%, and Shanghai's SSE Composite index dipped 0.49%, while Hong Kong's Hang Seng index jumped 2.99%.

European markets were trading significantly lower.

US markets ended in negative territory on Tuesday.

Foreign Institutional Investors (FIIs) bought equities worth ₹393.19 crore on Tuesday, according to exchange data.

On Tuesday, fag-end selling dragged the Sensex lower, leading the benchmark to settle 104.35 points, or 0.13%, down at 78,180.72. The Nifty dipped 31.65 points, or 0.13%, to end at 24,398.70.