Indian stock markets plummet over 2 pc rattled by Middle East tensions

The Indian equity markets opened sharply lower on Wednesday, tracking weak global cues and aggressive FII short positioning in index futures amid escalating geopolitical tensions in the Middle East. 

As of 9.28 am, Sensex lost 1,773 points, or 2.21%, to reach 78,465 and Nifty eased 549 points, or 2.21%, at 24,316.

Main broad-cap indices performed in line with the benchmark indices, as the Nifty Midcap 100 declined 2.18%, and the Nifty Smallcap 100 lost 2.17%.

All sectoral indices traded in red except Nifty IT, up 0.27%. Nifty metal and realty led losses, down 3.18% and 3.04%, respectively. Nifty auto dropped 2.97% while oil and gas dropped 2.86%.

Prolonged tensions among the United States, Israel, and Iran are mounting pressure on India across its current account, inflation outlook, and currency stability. 

Elevated crude prices stand to raise the country's import bill, widen its current account deficit, weaken the rupee, stoke inflation, and trigger foreign capital outflows, said Devarsh Vakil, Head of Prime Research at HDFC Securities.

WTI crude climbed above $75 a barrel, extending a two-day gain of approximately 11%. Brent traded near $81 a barrel as the widening Middle East conflict and shipping disruptions through the Strait of Hormuz kept supply risks firmly in focus.

Analysts said major global indices have turned decisively weak, reflecting a broad risk-off shift as conflict concerns deepen and crude oil prices spike.

On a sectoral basis defence, airlines, tourism, chemicals and oil-linked stocks are expected to remain in focus, as these segments are directly exposed to rising crude prices and war-driven disruptions, they said.

Elevated volatility is already evident, with India VIX at 17.13, warranting heightened caution, particularly for options traders, market participants said.

In Asian markets, China's Shanghai index lost 1.43%, and Shenzhen dipped 0.98%, Japan's Nikkei declined 4.17%, and Hong Kong's Hang Seng Index eased 2.9%. South Korea's Kospi lost 10.78%.

South Korea’s Kospi had plunged over 12% in early session Wednesday and temporarily halted trading after marking its worst day in decades, following a similar sell-off from the previous session.

A circuit breaker was also activated on the Kosdaq, which plummeted about 13%.

The US markets ended in red overnight as Nasdaq declined 1.02%. The S&P 500 lost 0.94%, and the Dow Jones declined 0.83%.

(This story was taken from syndicated feed and was only edited for style by Gujarat Samachar Digital team)