Indian Stock Markets Extend Losses for Third Session Amid Iran-US Tensions and Weak Earnings

The Indian stock market extended sharp losses for the third consecutive session, with Sensex and Nifty falling more than 1% each as rising worries over escalating tensions between Iran and the US, a rally in oil prices and other factors continue to spook investors.

Sensex dropped 999 points to 76,664, while Nifty 50 declined over 275 points to 23,897. Broader markets, which opened in the green, soon lost steam and slipped into the red. Nifty Midcap 100 and Nifty Smallcap 100 indices declined around 1% each. This came as India VIX, which measures volatility in markets, spiked over 6% to 19.72.

IT stocks including Infosys, HCLTech, Tech Mahindra and TCS were the top losers on Sensex, tumbling 4-7% after IT major Infosys’ Q4 earnings failed to impress Dalal Street. Sun Pharma, Asian Paints, ICICI Bank and Hindustan Unilever declined 2-4% each. Bucking the trend, Trent, Bajaj Finance and SBI shares were trading with marginal gains.

Sectorally, Nifty IT declined more than 5% to emerge as the top sectoral loser on the NSE, followed by Nifty Media and Nifty Pharma. Around 2,429 stocks declined on the exchange, while 863 advanced and 104 remained unchanged.

1) Iran-US war escalates Despite previous hopes of tensions in the oil-rich Middle East easing soon with a second round of negotiations between Iran and the US, worries seem far from over. The US continues to blockade the Strait of Hormuz. Meanwhile, Iran has used a swarm of small, fast boats to seize at least two container ships near the critical waterway, raising concerns that Trump’s claims that the US has disabled Tehran’s naval threats might not be entirely accurate.

US President Donald Trump has acknowledged that while Iran's conventional navy had been largely destroyed, its "fast-attack ships" had not been considered much of a threat. He said any such vessels coming near a US blockade set up outside the strait would be "immediately ELIMINATED" using the "same system of kill" deployed in the Caribbean and Pacific, where US air strikes have hit suspected drug boats and killed at least 110 people.

Iran on Thursday posted a video of commandos in a speedboat storming a large cargo ship after the collapse of peace talks, underlining its grip over the Strait of Hormuz, through which 20% of global oil and gas usually flows.

2) Oil prices surge As a result of rising worries over supply disruptions through the Strait of Hormuz, oil prices extended gains. Brent crude futures jumped more than 2% to cross $107 per barrel, while WTI crude futures were hovering near $98 per barrel.

3) Rupee slides The rupee dropped 1.4% to 94.2475 against the US dollar on Friday, continuing to weaken against the American greenback. The Indian rupee declined in all five trading sessions to log its steepest week-on-week loss since September 2022.

"Uncertainty around US-Iran talks and tensions in the Strait of Hormuz are further supporting crude, adding to inflation concerns and limiting rupee recovery," said Jateen Trivedi, VP Research Analyst, Commodity and Currency, LKP Securities.

4) FII remain net sellers Foreign investors continued to remain net sellers of Indian equities on Thursday, selling shares worth Rs 3,255 crore on Dalal Street, according to provisional data on the NSE.

5) Global markets Global markets remained mixed. Wall Street ended the previous session sharply in the red, with the tech-heavy Nasdaq declining around 0.9%. European markets, meanwhile, extended losses today, with France’s CAC, UK’s FTSE and Germany’s DAX falling up to 1%.

6) Bond yields rise As a result of renewed worries, bond yields rose. The yield on benchmark US 10-year notes rose to 4.33%, while the 30-year bond yield rose to 4.92%.

7) Weak earnings Weak earnings by heavyweight Infosys also may have dampened sentiment on Dalal Street. The company reported a 21% year-on-year rise in consolidated net profit for the quarter ended March 31, 2026, at Rs 8,501 crore, compared with Rs 7,033 crore in the same period last year. Brokerages like Jefferies and Morgan Stanley reduced its target price for the stock after the earnings, due to miss on estimates and weak revenue growth outlook.