Stock market update: Sensex, Nifty fall sharply as US-Iran tensions, crude above USD 100 weigh on markets

Stock markets slump in early trade after two-day rally. REPRESENTATIONAL PIC

Benchmark indices Sensex and Nifty tumbled in early trade on Friday after a two-day rally, tracking weak trends in global markets, as the ongoing US-Iran conflict continues to weigh on investor sentiment.

Crude oil prices remaining above the USD 100 per barrel mark and continued foreign fund outflows have also made investors risk-averse.

The 30-share BSE Sensex tanked 926.92 points to 74,346.53 in early trade, while the 50-share NSE Nifty dropped 280.95 points to 23,025.50.

Among the 30 Sensex firms, Bajaj Finance, Larsen & Toubro, Reliance Industries, Eternal, InterGlobe Aviation, and Bajaj Finserv were among the major laggards. On the other hand, Tata Consultancy Services, HCL Tech, Tech Mahindra, and Trent were among the gainers.

In Asian markets, South Korea's Kospi and Japan's Nikkei 225 index traded lower, while Shanghai's SSE Composite index and Hong Kong's Hang Seng index were in positive territory.

The US markets ended sharply lower on Thursday.

"Global sentiment has shifted firmly into risk-off territory. US markets came under sharp selling pressure, with the Nasdaq Composite falling 2.4 per cent and entering correction territory, now trading over 10 per cent below its recent peak. The Dow Jones fell by over 400 points, while the S&P 500 dropped 1.7 per cent, marking their steepest single-day declines since the escalation of the West Asia conflict.

This indicates that investor concerns are now deepening beyond short-term volatility and beginning to reflect broader macro risks," said Hariprasad K, Research Analyst and Founder of Livelong Wealth.

He added that the primary trigger for this shift remains the lack of meaningful progress in resolving the ongoing US-Iran conflict.

"Crude oil prices have once again moved above the USD 100 per barrel mark, reinforcing inflationary concerns globally. For India, this is particularly significant given its heavy reliance on crude imports," he said.

Brent crude, the global oil benchmark, traded 1.17 per cent lower at USD 106.8 per barrel.

"The US-Iran conflict continues to be a key overhang. While there are intermittent signs of de-escalation, the risk of renewed escalation persists, keeping markets highly sensitive to geopolitical developments," said Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm.

He added that Brent crude prices remain elevated and volatile, hovering in the USD 100-107 range, raising concerns around inflation, input costs, and broader macroeconomic pressures.

Ponmudi further said the ongoing uncertainty surrounding the deepening conflict in the Middle East has renewed a risk-off tone across global markets, with US equities closing sharply lower overnight.

Stock markets were closed on Thursday on account of Ram Navami.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,805.37 crore on Wednesday, according to exchange data. Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 5,429.78 crore.

On Wednesday, the Sensex had jumped 1,205 points, or 1.63 per cent, to settle at 75,273.45, while the Nifty surged 394.05 points, or 1.72 per cent, to end at 23,306.45.

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