Indian Equity Indices Plummet Over 2% Amid Global Market Selloff Following US-Iran Tensions

Indian benchmark equity indices slumped more than 2% on Wednesday, joining a global market selloff after Brent crude prices surged more than $5 a barrel following US President Donald Trump’s remarks that the ceasefire with Iran was “over”. Trump’s comments came after the US launched fresh strikes on Iran and ended a waiver that had allowed Iranian oil exports, fuelling fears of a prolonged conflict in West Asia and its impact on global energy supplies. The Sensex plunged 1,677.12 points, or 2.15%, to close at 76,503.60, while the Nifty fell 516.65 points, or 2.12%, to settle at 23,882.05, slipping below the 23,900 mark. Both indices recorded their steepest single-day decline in four months, since March 30, and ranked among the worst-performing major Asian markets. South Korea’s Kospi was the biggest loser, falling 5.35%. The index has now declined more than 20% from its June 22 peak, entering bear market territory. The India VIX jumped 26.01% to 14.68, its steepest single-day rise in 16 months, since April 7, 2025, signalling a sharp spike in market volatility. Investors’ notional wealth shrank by ₹8.97 lakh crore, the biggest single-day erosion in two months, since May 12, with the BSE’s total market capitalisation falling to ₹471.24 lakh crore. According to provisional exchange data, foreign portfolio investors bought shares worth ₹1,962.80 crore, while domestic institutional investors were net buyers of ₹790.16 crore. Nilesh Shah, managing director, Kotak Mahindra Asset Management, said, “The market is pricing in the possibility of further escalation following the exchanges between the US and Iran and is likely to remain volatile as long as the situation persists.” Vinod Nair, head of research at Geojit Investments, said sentiment on the domestic bourses turned decisively negative, wiping out recent gains as renewed tensions in West Asia pushed crude oil prices higher. “Inflationary concerns have resurfaced, driving bond yields higher in both India and the US. Volatility spiked sharply, with the India VIX registering a steep rise, while every sector ended in the red, reflecting a macro-driven flight from risk compounded by pre-earnings anxiety over muted first-quarter forecasts,” Nair added. Ajit Mishra, senior vice-president (research) at Religare Broking, said the selloff was triggered by renewed geopolitical tensions after Trump indicated that the US-Iran peace deal was “over”, reviving concerns over a prolonged conflict in the region. “The escalation pushed Brent crude prices sharply higher, reigniting inflation concerns and raising fears about the impact on India’s macroeconomic outlook,” he said. Market breadth remained decisively negative, with 3,205 stocks declining against 1,077 advances on the BSE. All sectoral indices on the BSE and NSE ended lower, led by PSU banks, private banks, FMCG, financial services and auto stocks. All 30 Sensex constituents closed in the red, while 45 of the 50 Nifty stocks ended lower. The broader BSE MidCap and SmallCap indices outperformed the benchmarks, declining 2.02% and 1.80%, respectively. Index heavyweights HDFC Bank , ICICI Bank and Reliance Industries together accounted for 619 points, or 37%, of the Sensex’s total decline. InterGlobe Aviation (IndiGo), ICICI Bank, Reliance Industries, Larsen & Toubro and Bharti Airtel were among the top Sensex losers, falling by up to 5%.