Indian stock markets witnessed a sharp sell-off at midday on Thursday, with Sensex trading at 72,111.15, down 1,023.17 points or 1.40%, and Nifty 50 at 22,380.15, declining 299.25 points or 1.32% from its previous close of 22,679.40. According to The Hindu BusinessLine, the indices had opened sharply lower following US President Donald Trump's televised warning that American forces would strike Iran "extremely hard" over the next two to three weeks, reversing the cautious optimism that had driven a 348-point Nifty rally just the previous session. Of 4,152 BSE stocks traded by midday, 2,390 had declined against 1,571 advances, with 147 stocks hitting 52-week lows against just 48 at 52-week highs. The losses were led by Eternal, which tumbled 4.93% to ₹224.87 on volumes of over 3.93 crore shares worth ₹89,021.79 lakh, while Jio Financial Services fell 3.12% to ₹224.70 and Asian Paints declined 3.09% to ₹2,157.10.
Crude oil remained the dominant driver across markets, with Brent crude, the global oil benchmark, surging 7 percent to $107.29 per barrel, while MCX April crude oil futures hovered near ₹9,800, having opened with a gap up from the previous close of ₹9,253. As reported by The Hindu BusinessLine, US oil was consolidating in the $105–$107 range, with analysts noting that a sustained move above $107 could push prices toward $110–$112. The Strait of Hormuz remains largely closed, with the supply disruption estimated at 10–15 million barrels per day. This surge in oil prices provides additional support for the potential market recovery, as energy costs are a key concern for Indian markets. However, the volatility in crude prices continues to weigh on investor sentiment amid geopolitical uncertainties.
The optimism stems from reports that US President Donald Trump is willing to end the war with Iran even if the Strait of Hormuz remains largely closed. As reported by The Wall Street Journal on Monday, citing administration officials, Trump told his aides that he is willing to end the war even if a large part of the operations through the Strait of Hormuz remains set to open at a later date. However, Trump's much-anticipated address failed to announce a ceasefire, instead framing the conflict as a military success story without providing clear de-escalation timelines. This development has provided positive signals for global markets, with oil futures declining more than 1% on Tuesday, further supporting expectations of a gap-up opening for Indian stock markets. The expectations of a relief rally come after a sharp crash yesterday, with Sensex and Nifty declining more than 2% each, representing the 21st consecutive session of foreign investor outflows.
Oil marketing companies came under significant pressure as escalating tensions in the West Asia region pushed crude oil prices sharply higher, raising concerns over a squeeze in refining and marketing margins. According to Moneycontrol, Hindustan Petroleum Corporation fell 3.55% to ₹318.25 per share, Bharat Petroleum Corporation declined 2% to ₹276.8, and Indian Oil Corporation dropped 1.65% to ₹133.48. In the metals space, copper and other industrial metals declined after Trump reiterated threats to strike Iran's civilian infrastructure if negotiations fail to end the ongoing conflict. APL Apollo Tubes and Hindustan Copper declined between 1 and 2%, while fertiliser stocks faced pressure with Rashtriya Chemicals and Fertilizers slipping up to 1%, and Fertilisers and Chemicals Travancore falling up to 1.5%. Rising energy costs are seen increasing fertiliser production expenses, which may add to broader inflationary pressures, though India's diversified fertiliser import sources are expected to provide some cushion against potential supply disruptions.
Market experts believe the Nifty's near-term trajectory will depend on whether key support levels hold amid elevated global uncertainty. According to Bajaj Broking, holding above 22,300 could lead to consolidation in the 22,300–22,900 range, while a failure to sustain these levels may extend the decline towards the 22,100–21,800 zone, which remains a crucial support area. The brokerage noted that the 22,100–21,800 band is a strong support zone, as it coincides with a long-term trendline connecting the last two-year lows along with the 200-week EMA. Vikram Kasat from PL Capital emphasized that sentiment would improve only if the Nifty reclaims key levels, with 22,150 seen as important for stability, while 23,480 remains a crucial resistance and breakout level. Immediate support is placed at 22,450, and a break below 22,280 could trigger further downside pressure.
Global brokerages have turned cautious on Indian equities amid rising energy risks, with Goldman Sachs cutting its 12-month Nifty target to 25,900 from 29,300 and downgrading Indian equities to 'marketweight' from 'overweight'. The brokerage had earlier raised its oil and gas price forecasts due to a longer impairment of Strait of Hormuz flows, reflecting India's greater vulnerability to the energy shock. Citi also lowered its Nifty target to 27,000 from 28,500, implying about 17% upside from the last close, and reduced valuation multiples. The brokerage estimated that prolonged supply disruptions could impact India's macroeconomic stability, including growth, inflation, fiscal deficit, and current account balance. With geopolitical tensions, rising oil prices, and cautious global cues dominating sentiment, analysts believe the Nifty could remain volatile, with downside risks persisting if key support levels fail to hold.
