Indian shares end lower as Mideast war, volatile oil hit sentiment

Indian benchmark shares slid on Wednesday as the escalating Middle East war and choppy oil prices fanned worries about their potential impact on inflation and growth.

The Nifty 50 settled 1.6% down at 23,866.85 and the BSE Sensex declined 1.7% at 76,863.71.

Twelve of the 16 major sectors declined, with heavyweights HDFC Bank and ICICI Bank dropping 1.8% and 1.3%.

Reliance Industries fell 1.3%. It gained as much as 1.8% in early trade after U.S. President Donald Trump announced the construction of a refinery backed by the Indian oil-to-telecom major, operator of the world’s biggest refining complex.

The smallcaps and midcaps dropped 0.4% and 1.3%, respectively.

“Volatility will likely persist as crude prices swing sharply and there is still no clarity on when the Middle East conflict will end, despite Trump’s recent comments,” said Sunny Agrawal, head of fundamental equity research at SBICAPS Securities.

The United States and Israel traded air strikes with Iran on Tuesday, even as Trump said on Monday that the conflict could be “over soon.”

Brent crude futures swung between gains and losses on Wednesday and were last trading up $3.52, or 4% higher, at$91.32 a barrel. Markets doubted whether the International Energy Agency’s reported plan for a record release of oil reserves could offset potential supply shocks.

“Uncertainty around crude and gas…is keeping the market on edge, and stability will return only once there is clearer direction on the war and energy prices,” Agrawal said.

The benchmarks have lost about 5% each since the start of the Iran war.

Liquefied natural gas stocks gained after the government invoked emergency measures to redirect supplies following disruption in the Strait of Hormuz. Adani Total Gas surged 20%, while Gujarat Gas and Indraprastha Gas jumped 4% and 3.5%, respectively.

Electronic units maker Sedemac Mechatronics jumped 7.3% in its trading debut in a weak market.