Sensex, Nifty tumble in early trade as US-Iran tensions and high oil prices weigh on markets

Benchmark indices Sensex and Nifty fell sharply in early trade on Friday after a two-day rally, tracking weak global markets amid escalating US-Iran tensions, high crude oil prices and continued foreign institutional investor outflows.

Mumbai: Benchmark indices Sensex and Nifty tumbled in early trade on Friday after a two-day rally, tracking a weak trend in global peers, as the US-Iran conflict continues to be a key overhang for the markets.

Crude oil prices staying above the USD 100 per barrel mark and unabated foreign fund outflows have also made investors risk-averse.

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The 30-share BSE Sensex tanked 926.92 points to 74,346.53 in early trade. The 50-share NSE Nifty dropped 280.95 points to 23,025.50.

From the 30-Sensex firms, Bajaj Finance, Larsen & Toubro, Reliance Industries, Eternal, InterGlobe Aviation, and Bajaj Finserv were among the major laggards.

Tata Consultancy Services, HCL Tech, Tech Mahindra, and Trent were among the gainers.

In Asian markets, South Korea’s benchmark Kospi and Japan’s Nikkei 225 index quoted lower, while Shanghai’s SSE Composite index, and Hong Kong’s Hang Seng index traded in positive territory.

The US market ended sharply lower on Thursday.

“Global sentiment has shifted firmly into risk-off territory. US markets came under sharp selling pressure, with the Nasdaq Composite falling 2.4 per cent and entering correction territory, now trading over 10 per cent below its recent peak. The Dow Jones fell by over 400 points, while the S&P 500 dropped 1.7 per cent, marking their steepest single-day declines since the escalation of the West Asia conflict.

“This indicates that investor concerns are now deepening beyond short-term volatility and are beginning to reflect broader macro risks,” Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.

The primary trigger for this shift remains the lack of meaningful progress in resolving the ongoing US-Iran conflict, he said.

“Crude oil prices have once again moved above the USD 100 per barrel mark, reinforcing inflationary concerns globally. For India, this is particularly significant given its heavy reliance on crude imports,” Hariprasad added.

Brent crude, the global oil benchmark, traded 1.17 per cent lower at USD 106.8 per barrel.

“The US-Iran conflict continues to be a key overhang. While there are intermittent signs of de-escalation, the risk of renewed escalation persists, keeping markets highly sensitive to geopolitical developments,” Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.

Brent crude prices remain elevated and volatile, hovering in the USD 100-107 range, once again raising concerns around inflation, input costs, and broader macro pressures, he added.

Ponmudi further said the ongoing uncertainty surrounding the deepening conflict in the Middle East has renewed a risk-off tone across global markets, with US equities closing sharply lower overnight.

Stock markets were closed on Thursday on account of Ram Navami.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,805.37 crore on Wednesday, according to exchange data. Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 5,429.78 crore.

On Wednesday, the Sensex jumped 1,205 points or 1.63 per cent to settle at 75,273.45. The Nifty surged 394.05 points or 1.72 per cent to end at 23,306.45.