Benchmark indices Sensex and Nifty continued their downward drift for a third consecutive session, as global headwinds and cautious investor sentiment weighed heavily on benchmarks. Persistent concerns surrounding the Iran-Israel conflict, along with a measured stance by the U.S. Federal Reserve, kept participants on edge, dampening risk appetite across the board.
The BSE Sensex, after a choppy day of trade, shed 82.79 points to close at 81,361.87, oscillating nearly 393 points through the session. It touched an intraday high of 81,583.94 and a low of 81,191.04, reflecting the prevailing unease. The NSE Nifty, meanwhile, slipped 18.80 points to finish at 24,793.25, registering a modest decline of 0.08 per cent.
Weakness among frontline stocks, such as Adani Ports, Bajaj Finance, Tech Mahindra, and IndusInd Bank, dragged the indices lower. However, a few notable names offered some support — Mahindra & Mahindra, Titan, Larsen & Toubro, and Bharti Airtel managed to close in the green, limiting broader losses.
Asian markets painted a similarly mixed picture. Key indices such as Japan’s Nikkei 225, Shanghai Composite, and Hong Kong’s Hang Seng ended lower, echoing the cautious global sentiment. Only South Korea’s Kospi bucked the trend, ending with minor gains.
Back home, within the Nifty 50 pack, Tata Consumer, Eicher Motors, and Mahindra & Mahindra stood out as bright spots. On the flip side, Adani Ports and Bajaj Finance featured among the biggest drags. Among sectoral indices, Nifty Auto was the only index to register gains, offering a rare glimpse of resilience. All other sectors ended in the red, with Nifty PSU Bank and Nifty Media suffering the steepest losses.
As traders await more clarity from global cues and central banks, volatility may remain the name of the game in the sessions ahead.
The mood on Dalal Street turned decidedly grim, with market breadth reflecting a strong bearish bias. Out of the Nifty 500 basket, a mere 61 stocks managed to stay afloat, while an overwhelming 438 counters ended in the red — a stark indicator of deep and widespread selling pressure.
Investor confidence took another hit after the U.S. Federal Reserve opted to hold interest rates steady but offered a sobering view on persistent inflationary trends and slower-than-expected economic growth. This cautious Fed stance rattled nerves, particularly in software exporters, which are sensitive to global economic cues.
Among the Sensex constituents, the heaviest drags came from Bajaj Finance, Tech Mahindra, IndusInd Bank, and Nestle India, which saw losses ranging between 1.28 per cent and 2.50 per cent. On the brighter side, defensive and auto-related names lent some support to the index. Mahindra & Mahindra, Titan, Maruti Suzuki, Bharti Airtel, and Larsen & Toubro ended with modest gains, rising between 0.32 per cent and 1.57 per cent.
The broader markets bore the brunt of the selloff, with the Nifty Midcap 100 sinking 1.63 per cent and the Nifty Smallcap 100 tumbling 1.99 per cent — signalling a sharper retreat among non-blue-chip names as investors moved to reduce risk.
In a rare show of resilience, the Nifty Auto index managed to buck the trend, inching up 0.52 per cent and standing alone in the green. Meanwhile, sectoral carnage was evident elsewhere: the Nifty PSU Bank index emerged as the worst-hit, plunging 2.04 per cent, while the Nifty Metal, Media, and Realty indices all slumped by over 1 per cent each.
With volatility resurfacing and sentiment turning fragile, analysts expect market participants to stay cautious in the days ahead, especially in the run-up to more global economic data and corporate earnings.
FLAT START FOR SENSEX & NIFTY AS GEOPOLITICAL TENSIONS CAST A LONG SHADOW
Indian equity benchmarks opened cautiously on Wednesday as simmering tensions in the Middle East kept investors on edge. Fears of a potential U.S. military strike on Iran and the unpredictability of Tehran’s response weighed heavily on market sentiment.
The Nifty 50 began the day slightly in the red, slipping 8.80 points to 24,803.25, while the BSE Sensex opened lower by 40.72 points at 81,403.94. The muted open reflected the broader mood of unease as global investors braced for potential geopolitical escalation.
Market watchers attributed the soft start to intensifying concerns around the Iran-Israel conflict, now complicated by the prospect of direct U.S. involvement. If tensions escalate, a wave of risk-off sentiment could ripple through global financial markets, they warned.
Across the Atlantic, President Donald Trump held an emergency round of security meetings, the second in two days, to explore strategic responses. While his core support base remains wary of foreign entanglements, some within the Republican establishment are openly calling for a strike. However, Trump remains cautious, balancing his hawkish instincts with lessons from past interventions in Iraq and Afghanistan, as well as the current strategic pivot towards the Indo-Pacific aimed at containing China’s influence.
SECTORAL PAIN, MIXED BROADER TRENDS
Back home, mid- and small-cap indices showed mixed undertones. The Nifty Midcap 100 managed to eke out marginal gains of 0.07 per cent, while the Nifty Smallcap 100 hovered near flatline levels.
However, sectoral trends painted a largely bearish picture. Nifty Auto, FMCG, IT, Media, and Metal all opened in the red. The lone outlier was Nifty Realty, which managed to inch higher, reflecting selective investor interest in rate-sensitive plays.
Asian peers echoed similar jitters. Japan’s Nikkei 225 dropped 0.65 per cent, Hong Kong’s Hang Seng plunged 1.7 per cent, Taiwan’s benchmark slipped 1.24 per cent, and South Korea’s KOSPI dipped 0.34 per cent — mirroring the global risk aversion mood. Meanwhile, U.S. equities traded flat to negative on Wednesday, after the Federal Reserve held rates steady, as expected.
In his statement, Fed Chair Jerome Powell flagged the risk of tariff-induced inflation, even as he underscored that the U.S. economy and labor markets showed no signs warranting a rate cut.
RUPEE UNDER PRESSURE; COMMODITIES SWING
Amid rising global uncertainty and a hawkish Fed stance, the Indian rupee weakened further, marking its third consecutive session of losses. Analysts now anticipate the USD/INR pair could test levels between 87 and 87.50, with geopolitical shocks adding pressure to an already fragile currency environment.
Commodities, too, reflected the volatility. Gold prices fluctuated within a narrow band. On COMEX, the yellow metal swung between $3,347 and $3,375, while on MCX, domestic gold traded in the range of Rs.98,650 to Rs.99,450.
CRUDE OIL: VOLATILE BUT FUNDAMENTALLY STABLE
Despite recent price spikes triggered by the Iran-Israel conflict, analysts expect Brent crude to remain relatively stable, averaging around $70 per barrel in FY26. A report by Emkay Research suggests that global oil supply remains robust, thanks to steady output from OPEC+ and non-OPEC producers alike.
While an initial 12–13 per cent spike had pushed Brent prices near $80/bbl, markets have since retraced to the $75 range. Despite tit-for-tat missile attacks between Iran and Israel, crude prices have shown signs of settling — unless a significant strike damages critical energy infrastructure, as seen during the early days of the Russia-Ukraine war.
The report notes that a potential ceasefire could bring prices below $70 per barrel, and such a scenario would likely favour downstream oil companies and oil marketing companies (OMCs) over upstream producers. Valuation-wise, oil marketing companies are positioned more attractively given the current landscape.
However, risks remain. Iran has reportedly partially shut its South Pars gas field after Israeli strikes hit fuel depots and a key refinery. Meanwhile, Israel has halted operations in two gas fields that supply Egypt and Jordan. This has pushed spot LNG prices up to $13.5/MMBtu, compared to $12/MMBtu before the conflict began.
Adding to the complexity, the early arrival of monsoon in India has softened gas demand, clouding the near-term outlook for the natural gas market.
Meanwhile, equities remain in a holding pattern amid global turmoil, while fundamentals in commodities and currency markets offer clues to deeper undercurrents. With inflationary risks returning to the fore and central banks treading carefully, investors may need to brace for heightened volatility in the weeks ahead — and prepare for tactical shifts across asset classes.
