India's equity benchmarks log worst day in 2 weeks on widening Mideast conflict
- The benchmark Nifty 50 fell 0.79% to 23,996.25, while the BSE Sensex shed 0.92% to 76,755.05
Indian equity benchmarks recorded their biggest daily loss in two weeks, driven by escalating Middle East tensions pushing Brent crude prices higher and raising inflation concerns for India.
- Widening Middle East conflict and rising Brent crude prices.
- India's economic vulnerability to higher oil costs and inflation.
- Sectoral losses and key stock movements in Indian markets.
India’s equity benchmarks recorded their biggest daily loss in two weeks on Wednesday, as threats of a widening conflict in the Middle East pushed Brent crude over $95 per barrel and raised inflation risks.
The benchmark Nifty 50 fell 0.79% to 23,996.25, while the BSE Sensex shed 0.92% to 76,755.05. This was their third consecutive session of losses.
Brent crude futures were set for their fourth straight session of gains, rising to their highest since June 11.
Two oil tankers carrying Saudi crude to Asia reversed course in the Red Sea on Tuesday, while a tanker was hit in the Strait of Hormuz at the mouth of the Gulf.
U.S. Secretary of State Marco Rubio said on Wednesday the United States is still willing to negotiate an end to the Iran crisis, but Tehran is not serious about talks, as the widening conflict disrupted two of the world’s most critical energy chokepoints.
Higher oil prices pose a key risk for India, the world’s third-largest crude importer, by stoking inflation, widening the trade gap and squeezing corporate margins.
“While the ongoing earnings season has largely been in line with expectations, the broader (geopolitical) challenges are creating an overhang for markets,” said Pankaj Pandey, head of retail research at ICICI Securities.
Fourteen of the 16 major sectors logged losses. The small-caps and mid-caps lost 1.5% and 1.1%.
Heavyweight financials and information technology stocks dropped 1.3% and 1.5%. Pharma stocks fell 1.3% after U.S. President Donald Trump outlined a phased tariff plan for imported generic medicines, creating an overhang for the sector.
Bandhan Bank tumbled 16.9% after lowering its fiscal year return-on-assets outlook due to likely moderation in net interest margins and higher operating expenses.
Bajaj Auto and TVS Motor gained 5.7% and 3.3% after reporting a quarterly profit rise. They helped the auto index rise 0.2%.
Nestle India rose 2.9% after earnings, and helped push the consumer goods index up 0.7%.
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