India’s equity benchmarks log steepest drop in 2 weeks as US-Iran tensions weigh on sentiment

Indian stock benchmarks logged their biggest daily losses in more than two weeks on Thursday as escalating U.S.-Iran tensions pushed crude prices higher and dampened sentiment in the world’s third-largest oil importer.

The Nifty 50 fell 1.41% to 25,454.35 and the BSE Sensex shed 1.48% to close at 82,498.14. The decline wiped out gains from the last three sessions.

All 16 major sectors fell, while the small- and mid-caps lost 1.3% and 1.6%, respectively, snapping a three-day winning streak.

Brent crude oil prices rose 1% to $71 per barrel on Thursday, building on the previous day’s 4% jump amid heightened military activity in the key oil-producing region.

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“For India, this is worrisome because we are a major crude importer and any sustained rise in oil prices feeds straight into market sentiment and the economy through imported inflation,” said Aishvarya Dadheech, founder and chief investment officer at Fident Asset Management.

Dadheech added that geopolitical tensions became the “perfect trigger” for selling as investors were already sitting on three consecutive sessions of gains.

Oil marketing firms Indian Oil Corp, BPCL and HPCL dropped 2.5%, 3.5% and 5%, respectively.

In contrast, upstream oil companies, such as ONGC and Oil India, which tend to benefit from higher prices, gained 3.8% and 5.1%.

Oil-to-telecom conglomerate Reliance Industries shed 2.2%, while financials lost 1.4%, led by 1% and 1.4% drops in private lenders HDFC Bank and ICICI Bank.

IT stocks, which rose as much as 1.5% earlier in the session, gave up gains and settled 1.1% lower in a weak market. The index has lost 15% this month amid worries over

AI-led disruption.