Indian stock markets experienced a sharp 2% decline on Tuesday, marking the fourth consecutive session of losses amid escalating US-Iran tensions and global market nervousness. The BSE Sensex tanked 1,456.04 points, or 1.92%, to settle at 74,559.24, while the NSE Nifty dropped 436.30 points, or 1.83%, to end at 23,379.55. According to Outlook Business, the selloff was driven by elevated crude oil prices and uncertainty surrounding the West Asia conflict that clouded market confidence. From the Sensex pack, major laggards included Tech Mahindra, Adani Ports, HCL Tech, Tata Consultancy Services, Titan and Bharat Electronics, while State Bank of India was the only gainer. The broader market pressure reflects what analysts describe as a "confidence shock" rather than routine profit-booking.
Brent crude, the global oil benchmark, traded 2.75% higher at USD 107.1 per barrel, reaching multi-year highs that significantly impacted market sentiment. This surge in oil prices, linked to escalating tensions in West Asia, amplified the pressure on Indian equities. The Indian rupee depreciated 35 paise to close at an all-time low of 95.63 against the US dollar on Tuesday, adding to market concerns about currency stability. As per Outlook Business, the rupee's decline reflects the broader market nervousness and investor concerns about global developments affecting India's economic outlook. The currency weakness, combined with persistent portfolio outflows and weakening sentiment, created additional pressure on equity markets. According to Reuters, around 80% of sea-borne oil trade through the Strait of Hormuz is usually destined for Asia, making it the most exposed region to any disruption, with currencies in Indonesia, India, and the Philippines hitting historic lows.
Foreign Institutional Investors (FIIs) offloaded equities worth ₹8,437.56 crore on Monday, according to exchange data, continuing the aggressive selling trend that has pressured Indian markets. According to Outlook Business, this represents a macro "triple hit" - crude oil prices hovering near USD 105-107 per barrel, the rupee slipping to a fresh record low against the US dollar, and continued aggressive FII outflows. Market analysts note that "Domestic equities remained under pressure, with the rupee weakening to record lows amid rising crude oil prices linked to escalating tensions in West Asia, along with FII outflows. The decline was broad-based, led by IT and realty stocks." As per Reuters, central banks have intervened in currency markets for weeks, either directly or through state-bank action, and are looking for more measures to take, with analysts expecting "more creative measures to support their respective currencies."
Several companies are set to announce their quarterly earnings today, with Dr Reddy's Laboratories reporting a significant decline in profitability. According to reports, Dr Reddy's profit sank 86.2% to ₹220.1 crore compared to ₹1,593.9 crore in the previous year, while revenue dropped 11.6% to ₹7,516.2 crore from ₹8,506 crore. Other notable earnings include Tata Power Company with profit falling 4.5% to ₹995.9 crore and revenue declining 12.8% to ₹14,900.2 crore. Torrent Power saw a more severe impact with profit tanking 70% to ₹318.2 crore versus ₹1,059.6 crore in the previous year, though revenue remained relatively stable with a marginal 0.8% decline.
**US President Donald Trump on Monday said the ceasefire with Iran was "on life support" after Tehran rejected a U.S. proposal to end the months-long war as "totally unacceptable." As per Outlook Business, Trump told reporters at the Oval Office that "It is at its weakest... After reading that piece of garbage they sent us... It's on life support, massive life support." This escalation in geopolitical tensions has significantly impacted global market sentiment and contributed to the sustained selling pressure across Indian markets. The Iran war, in its 11th week, showed no signs of a near-term resolution, with Trump's declaration that the truce was "on life support" after Tehran rejected a US proposal. Market sentiment is expected to stay fragile until there is greater clarity on geopolitical developments and stability in energy prices. According to Reuters, the war has piled fresh pressure on the yen, already weakened by Japan's low interest rates and worries over Prime Minister Sanae Takaichi's borrowing-led growth plans, with Japan importing about 95% of its oil from the Middle East.
