Indian equities experienced a severe sell-off on Tuesday as Brent crude climbed above $76 per barrel, with Sensex crashing over 680 points to an intraday low of 77,498.70 and Nifty slipping below the 24,200 mark as escalating US-Iran tensions and rising crude oil prices triggered broad-based profit booking. As of 12:33 PM IST, the BSE Sensex was down 662.01 points (0.85%) at 77,518.71, while the Nifty 50 fell 203.75 points (0.84%) to 24,194.95. The sell-off erased roughly ₹1.27 lakh crore in BSE market capitalisation, with market breadth remaining decisively negative as declining stocks outnumbered advancing shares by more than four to one. Thirteen of sixteen major sectors traded lower, with Oil & Gas and FMCG stocks leading the losses as higher crude raised input costs and margin concerns for refiners, consumer companies and automakers. India VIX jumped 19% to 13.82, reflecting heightened risk sentiment on geopolitical news.
Oil prices experienced a significant surge following fresh geopolitical tensions in the Middle East, with Brent crude climbing 3.44% to $76.71 per barrel after fresh US military strikes against Iran heightened concerns over global oil supply. The rally came after the US launched military strikes against Iran in response to attacks on commercial vessels transiting the Strait of Hormuz, raising fresh concerns about potential disruptions to global energy supplies. According to reports from U.S. Central Command, U.S. forces have begun launching a series of powerful strikes against Iran to impose heavy costs for targeting and attacking commercial shipping crewed by innocent civilians in an international waterway. The U.S. strikes were in response to Iranian attacks on three commercial vessels transiting the Strait of Hormuz, with the command stating that "Iran's demonstrated aggression was unwarranted, dangerous, and a clear violation of the ceasefire." Both benchmarks rose about 3% on Tuesday after the US revoked the general licence authorising the sale of Iranian crude following the Iranian attacks, with the latest escalation seeing the US Treasury revoke a sanctions waiver that had allowed Iran to continue limited oil exports under last month's interim peace agreement. Both benchmarks rose about 3% on Tuesday after the US revoked the general licence authorising the sale of Iranian crude following the Iranian attacks, with the latest escalation seeing the US Treasury revoke a sanctions waiver that had allowed Iran to continue limited oil exports under last month's interim peace agreement.
The banking and financial sectors faced severe pressure as investors factored in margin pressure from elevated crude prices, with Nifty Bank falling 1,390.30 points (2.39%) to 56,816.95 and the Nifty Financial Services Index declining 620.50 points (2.30%) to 26,351.15. Jio Financial Services dropped 5.10% and Tata Consumer Products fell 3.34% as financial stocks witnessed sharp profit booking. Banking stocks weighed the most on the benchmarks, with Reliance Industries Ltd., ICICI Bank, Bharti Airtel, HDFC Bank and Axis Bank being the largest drags on the Nifty 50 during the session. Reliance Industries alone shaved 30.68 points off the index, followed by ICICI Bank at 28.48 points and Bharti Airtel at 18.16 points. The Nifty Smallcap 100 declined 0.24% and the Nifty Midcap 100 fell 0.12%, indicating cautious sentiment beyond large-cap stocks. Among the major losers were BPCL, HPCL, Indian Oil, Asian Paints, IndiGo and ITC, as investors factored in the possibility of margin pressure if crude prices remain elevated.
Oil marketing companies faced significant pressure as Brent crude prices climbed more than 3% following fresh US military strikes against Iran, with higher crude costs typically pressuring their marketing margins. Hindustan Petroleum Corporation Ltd (HPCL) declined 3.08%, Bharat Petroleum Corporation Ltd (BPCL) fell 2.93%, Indian Oil Corporation (IOC) slipped 1.52%, while Reliance Industries was down 1.23%. However, Chennai Petroleum Corporation (CPCL) bucked the trend, rising 4.04% to ₹1,130 despite weakness across most OMC stocks. MRPL traded marginally higher, gaining 0.48%, while the Nifty Oil & Gas index fell 1.28% to 11,105.40. The latest escalation has renewed concerns over the security of crude shipments through the Strait of Hormuz, a key global oil transit route, with any disruption to supplies from the region could tighten global oil availability and keep crude prices volatile.
Sectoral indices largely traded in the red with Nifty Oil & Gas declining 1.57%, making it the worst-performing sector, followed by Nifty FMCG falling 1.33% and Nifty Media losing 1.29%. Nifty Financial Services dropped 0.92%, followed by Nifty Rural at 0.88%, Nifty Bank at 0.78%, Nifty Consumption at 0.75%, Nifty PSU Bank at 0.74% and Nifty Auto at 0.58%. Nifty IT slipped 0.52%, Nifty Energy declined 0.47% and Nifty India Defence fell 0.07%. However, Nifty Metal, Nifty Pharma and Nifty Realty were the only sectoral indices trading in positive territory, rising 0.03%, 0.07% and 0.59% respectively. Defensive sectors like pharma and healthcare gained about 0.5-0.8% as investors rotated into relatively insulated sectors amid crude and monsoon risks, with Sun Pharma benefiting from defensive rotation into healthcare and Info Edge rising 3.1% after upbeat June quarter update.
Market breadth analysis revealed significant selling pressure across all segments, with 3,178 stocks trading on NSE, of which 1,719 declined and 1,357 advanced, while 102 remained unchanged. As many as 68 stocks touched their 52-week highs, while 29 hit their 52-week lows, indicating broad-based volatility. In the midcap segment, Kalyan Jewellers, Info Edge, National Aluminium, Indus Towers, MCX and FSN E-Commerce Ventures (Nykaa) gained between 2% and 7%, while Hindustan Petroleum, Jubilant FoodWorks, Coforge, Bank of India and 360 One WAM declined between 2% and 3%. In the smallcap space, Aegis Logistics fell around 8% and was the biggest drag on the index, with Cohance Lifesciences, City Union Bank, Force Motors and Zensar Technologies declining between 2% and 3%, while Anant Raj, Ather Energy, GMDC, MRPL and JBM Auto rose between 2% and 6%. Among Nifty 50 constituents, Eternal, Wipro, Bajaj Auto, Hindalco and Trent were among the top gainers, while Jio Financial, IndiGo, Shriram Finance and Tata Consumer Products emerged as the major laggards. On Wednesday afternoon, Sensex traded at 77,598.09, down 582.63 points or 0.75%, while Nifty 50 was at 24,218.90, down 179.80 points or 0.74% as of 1:30 PM, with BSE trading 3,412 stocks with 1,880 declining against 1,357 advancing.
