Equity benchmark indices Sensex and Nifty declined in early trade on Tuesday (May 5, 2026) amid fresh tensions in the Strait of Hormuz region. According to reports from PTI, the 30-share BSE Sensex declined 361.62 points to 76,907.78 in early trade, while the 50-share NSE Nifty dropped 134.90 points to 23,980.60. The decline was attributed to renewed geopolitical concerns and a weakening rupee performance. From the 30-Sensex firms, Larsen & Toubro, Bajaj Finance, Bajaj Finserv, ICICI Bank, Sun Pharma and Maruti were among the major laggards, while Bharti Airtel, Reliance Industries, Titan and Bharat Electronics were among the winners. However, markets showed recovery later in the day with Sensex climbing 355.90 points or 0.46 per cent to settle at 77,269.40 and Nifty rallying 121.75 points or 0.51 per cent to end at 24,119.30, as reported by PTI.
The market decline was primarily driven by fresh tensions in the Strait of Hormuz region, as reported by PTI. This geopolitical development created uncertainty in the market and contributed to the negative sentiment affecting equity performance. Brent crude, the global oil benchmark, traded around USD 113 per barrel mark, adding to market concerns about energy prices. The tensions have added to existing market concerns about regional stability and their potential impact on global trade flows, with experts noting that the resumption of hostilities in the Hormuz region and Brent crude again spiking to around USD 113 are headwinds for the market. As per VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, "The market trend will be guided by the developments in West Asia particularly in the Strait of Hormuz."
The rupee falling to all-time low of 95.40 against U.S. dollar in early trade also added to the weak trend in equities, according to PTI reports. The currency depreciation has created additional pressure on the market, with the rupee's decline contributing to the overall negative sentiment affecting investor confidence and market performance. Elevated oil prices, still holding above the USD 100 mark, continue to pose a macro risk for India, given its import dependence, as noted by Hariprasad K, Research Analyst and Founder, Livelong Wealth. US markets saw sharp selling pressure, with the Dow correcting significantly as crude oil surged on renewed geopolitical concerns around the Strait of Hormuz, as reported by PTI.
Market experts suggest that Indian equity markets are likely to trade with a cautious bias, as renewed tensions between the US and Iranian forces weigh on investor sentiment, according to Ponmudi R, CEO of Enrich Money. While the outcome of recent state assembly elections and fresh data indicating foreign portfolio investors have turned net buyers of domestic equities offer some measure of support, the broader mood remains one of restraint. Geopolitical uncertainty and prevailing global risk aversion continue to dominate sentiment, limiting the scope for a sustained upside in the near term, as noted by Ponmudi. In Asian markets, Hong Kong's Hang Seng index quoted lower, while US markets ended lower on Monday amid sharp selling pressure.
Despite the current market volatility, Foreign Institutional Investors (FIIs) turned buyers on Monday, buying equities worth ₹2,835.62 crore, according to exchange data. This positive foreign investment flow provides some support to the market amid the geopolitical uncertainties. The contrast between the foreign buying and domestic selling pressure highlights the mixed sentiment in the current market environment. The positive foreign investment activity comes amid the broader market weakness driven by geopolitical concerns.
