Indian Equity Benchmarks Tank Amid US-Iran Tensions, Rising Crude Oil Prices

The latest flare-up in West Asia has once again pushed Brent crude prices close to the $97-per-barrel mark. (AI image)

Stock market crash today: Indian equity benchmarks, Nifty50 and BSE Sensex, tanked in trade on Wednesday as fresh tensions between US and Iran weighed on sentiment and led to crude oil prices rising. Both the Sensex and Nifty declined more than 1% as investor sentiment weakened amid growing concerns over the Iran-US conflict, continued foreign institutional investor (FII) outflows and a host of other market challenges. The decline erased more than Rs 3 lakh crore from the combined market value of BSE-listed companies, reducing overall market capitalisation to nearly Rs 459 lakh crore.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the latest flare-up in West Asia has once again pushed Brent crude prices close to the $97-per-barrel mark, offering little relief from the energy-related pressures facing India. He added that market participants would closely track the Reserve Bank of India's commentary and policy actions scheduled for June 5. Vijayakumar also highlighted the continuing strength in semiconductor-driven markets such as South Korea and Taiwan. By comparison, he said India's corporate earnings outlook for FY27 could face moderate pressure from slower economic growth and elevated inflation. These factors have weighed on market sentiment in recent months. However, he pointed out that steady participation from retail investors continues to provide support, with domestic investors remaining active despite multiple headwinds. Also Read | Why did Taiwan, South Korea overtake India? Drop from 5th to 7th largest stock market - explained in 10 charts

Why is stock market down today? Top reasons

1) US-Iran tensions Uncertainty in the Middle East remained high despite US President Donald Trump's recent remarks suggesting that Washington and Tehran were moving closer to ending the conflict that has persisted for the past three months and restoring normal movement through the Strait of Hormuz. The US military said on Tuesday that it had intercepted and neutralised multiple Iranian missile and drone attacks across the Gulf region. The US Central Command (CENTCOM) also reported carrying out defensive strikes on Iran's Qeshm Island.

2) Crude oil prices move higher Brent crude futures advanced nearly 1% to trade close to the $97-per-barrel mark, while US benchmark WTI crude also gained about 1%, hovering around $95 per barrel.

3) Rupee remains under pressure The Indian rupee weakened by 14 paise against the US dollar in early Wednesday trade, slipping to 95.50. Rising crude oil prices have continued to fuel concerns about India's import costs and inflation trajectory, prompting caution in the currency market, according to Jateen Trivedi, Vice President – Research Analyst, Commodity and Currency, at LKP Securities.

4) Foreign investors continue to pull money out Selling by foreign institutional investors showed no signs of easing, adding to the pressure on domestic equities. On Tuesday alone, overseas investors offloaded Indian shares worth nearly Rs 8,363 crore.

5) US bond yields edge higher US Treasury yields moved up amid renewed geopolitical uncertainty. The yield on the benchmark 10-year Treasury note rose to 4.457%, while the 30-year bond yield climbed to 4.97%. Higher bond yields generally enhance the attractiveness of fixed-income investments, often prompting investors to shift funds away from riskier assets such as equities. This can create additional pressure on stock markets.

6) Profit-booking hits IT stocks The weakness in the broader market may also have been amplified by selling in information technology stocks. The sector had delivered strong gains in recent sessions despite heightened volatility elsewhere in the market. After such a sharp run-up, investors appeared to lock in profits in several large-cap technology counters. The resulting decline in heavyweight IT stocks likely added to the negative mood across the broader market and contributed to the day's downturn.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.)