Indian benchmarks log biggest one-day loss in three months as oil prices soar

Indian benchmark shares logged their biggest one-day loss in three months on Wednesday after U.S. President Donald Trump said a peace accord with Iran was “over”, fuelling a surge in oil prices that hurt investor sentiment and sent global stocks tumbling.

The benchmark Nifty 50 fell 2.12% to 23,882.05 and the BSE Sensex slid 2.15% to 76,503.6, both logging their worst session in more than three months.

In a flare-up of hostilities that pushed oil prices up to a two-week high, Iran said it targeted U.S. military sites in Bahrain and Kuwait after U.S. forces struck Iranian targets in response to attacks on tankers in the Strait of Hormuz.

Brent crude surged 6.3% to about $79 a barrel, sending Europe’s STOXX 600 on course to its worst session in three months. Asian markets also declined. U.S. equity futures, dropped about 1% each.

The Indian rupee dropped 0.62% to 95.5550 and bond prices fell, sending the benchmark yield up over 7 basis points to 6.7692 by 3:40 p.m. IST.

Higher oil prices hurt India, the world’s third-largest oil importer and consumer, by widening the import bill, stoking inflation and squeezing growth.

The developments have reignited worries over energy supplies and oil prices, a key pressure point for India’s markets and macros, said Kranti Bathini, director of equity strategy at Wealth mills Securities. “This could also spark fresh foreign outflows, potentially slowing a market that was on the verge of recovery.”

Two traders said the late-session slide was likely driven by foreign investors selling stocks after three sessions of inflows, as higher crude prices have revived macro concerns.

Foreign investor favourites, financials and IT, lost 2.5% and 1.4%, respectively.

All 16 major sectors logged losses. The broader small-caps and mid-caps fell 2.2% and 1.6%, respectively.

Crude-sensitive oil and gas index, auto and FMCG indexes lost about 2.2%-2.5%.

Oil marketing companies, paint makers, airline operators and tyre makers all tumbled as rising crude prices stoked margin concerns.