Indian equity benchmarks muted on caution over shaky US-Iran truce

India’s stock benchmarks were little changed in early trade on Wednesday, as caution prevailed over the shaky truce between the U.S. and Iran amid worries of an escalation in the Middle East conflict.

The benchmark Nifty 50 rose 0.08% to 23,937.90 and the BSE Sensex added 0.11% to 76,094.41, as of 10:14 a.m. IST. The indexes have fallen 5.1% and 6.6%, respectively, since the Iran war broke out at the end of February.

Iran said the U.S. had violated a ceasefire by striking targets near the contested Strait of Hormuz, potentially complicating efforts to bring the three-month-old war to a close. U.S. Secretary of State Marco Rubio has said it could take “a few days” to negotiate a deal.

Brent crude hovered around $98 a barrel.

“Investor sentiment is likely to stay cautious as mixed signals from U.S.-Iran talks and recent U.S. strikes on Iran deepen risk aversion,” said Siddhartha Khemka, head of research of wealth management at Motilal Oswal Financial Services.

Also read: Indian shares muted as US strikes dent Mideast peace hopes, spur caution

India’s broader small-caps and mid-caps gained about 0.2% and 0.4%, respectively.

Eight of the 16 major sectors logged gains.

Financials and private banks both dropped 0.4%, dragged by a 2% fall in India’s largest private lender HDFC Bank.

The Indian Express reported that HDFC Bank had conducted an internal vigilance probe into 450 million rupees ($4.7 million) in interest payments to the Maharashtra State Road Development Corporation which were outside permitted banking regulations and governance practices.

HDFC Bank did not immediately respond to Reuters’ queries, seeking its comments on the report.

The metals index gained 1.8%, led by a 4% rise in aluminium makers Hindalco and National Aluminium , as aluminium prices surged to a more than four-year high.

Coal India fell 4% as the government announced an up to 2% stake sale via an offer for sale at a 10% discount to its last close. Oil and Natural Gas Corp lost 3% on modest quarterly revenue and profit growth.