Sensex, Nifty fall nearly 2% as Iran tensions rattle markets

India’s benchmark equity indices declined sharply in early trading on Thursday, as escalating geopolitical tensions following remarks by US President Donald Trump unsettled global markets and pushed oil prices higher.

The BSE Sensex dropped by over 1,400 points, or nearly 2 per cent, to trade at 71,700.60, while the NSE Nifty fell close to 2 per cent to 22,233.70. The sell-off was broad-based, with all 30 Sensex constituents trading in negative territory.

Major losers included Sun Pharmaceutical Industries, InterGlobe Aviation (IndiGo), Adani Ports, Larsen & Toubro, Asian Paints, NTPC, State Bank of India, Kotak Mahindra Bank and Axis Bank, among others.

Investor sentiment weakened after Trump warned of intensified military action against Iran in the coming weeks, raising fears of prolonged instability in the Middle East. The development triggered a spike in crude oil prices, with Brent crude rising to around $105 per barrel.

Market experts said the surge in oil prices, coupled with rising US bond yields, has added pressure on global financial markets. The yield on the US 10-year Treasury note climbed to about 4.36 per cent, while precious metals saw only modest movement despite the uncertainty.

Foreign institutional investors continued to pull money out of Indian equities, selling shares worth more than Rs 8,300 crore on Wednesday, according to exchange data. Domestic institutional investors provided partial support by purchasing stocks worth over Rs 7,100 crore.

Analysts noted that multiple factors—including elevated crude prices, a widening trade deficit, concerns over remittance flows and sustained foreign portfolio outflows—are putting pressure on the Indian rupee, which has weakened despite measures by the Reserve Bank of India to stabilise currency markets.

The downturn in Indian equities mirrored broader weakness across Asia. South Korea’s Kospi fell more than 4 per cent, Japan’s Nikkei 225 declined over 2 per cent, while Hong Kong’s Hang Seng and China’s Shanghai Composite also traded lower.

In contrast, US markets had ended the previous session on a strong note, highlighting the volatility and divergence in global investor sentiment.

The sharp decline follows a strong rally on Wednesday, when the Sensex had surged by more than 1,100 points and the Nifty gained 348 points, underscoring the fragile and rapidly shifting market outlook.

With PTI inputs