Indian shares join global slide as Mideast woes mount

Indian shares fell alongside global markets on Wednesday as renewed U.S.-Iran strikes heightened the risk of disruptions to oil flows, reviving inflation concerns amid a global bond rout that pushed borrowing costs to multi-decade highs.

The Asian country is the third-largest crude importer and consumer, making it vulnerable to a sustained rise in oil prices, which can push up the cost of living, hurt growth and widen the import bill.

“Market sentiment remains under pressure amid a sharp surge in crude oil prices, triggered by escalating geopolitical tensions in West Asia, which has significantly dampened traders’ risk appetite,” said Sudeep Shah, head of technical and derivatives research at SBI Securities.

India’s Nifty 50 fell 0.59% to 23,914.45 and the Sensex shed 0.49% to 76,570.35, paring losses of 0.7% and 0.6% from before the closing auction.

The indexes have fallen 5% since the Iran war broke out more than six months ago.

Eleven of the 16 major sectors declined. The broader small-caps and mid-caps lost 0.4% and 0.5%, respectively.

The U.S. and Iran are back on a war footing after the most significant exchange of fire in weeks, with Washington threatening more devastating strikes.

Brent crude rose 0.3% to $95 a barrel, paring some gains after hitting a near-six-month high earlier in the session, lifting bond yields on worries of a near-term U.S. rate hike.

Higher U.S. rates make emerging markets less attractive for global investors.

Among stocks, Hero MotoCorp dipped 4.6%, leading losses on the auto index, which fell 1.8%, after exports for India’s top two-wheeler maker slid and market share declined in August.

Online delivery platform Swiggy fell 2.7%, weighed by concerns over a foreign ownership cap, which could potentially trigger passive fund outflows.

Bucking the trend, Coal India advanced 4.1% after multiple brokerages said earnings could improve in the ongoing quarter due to higher pricing.