Indian Equities Slide as Crude Surpasses $110 Amid West Asia Tensions

Indian equity benchmarks opened sharply lower on Thursday, pressured by surging crude oil prices and fresh geopolitical flashpoints in West Asia.

The BSE Sensex opened at 73,343.33 and traded down 691.03 points, or 0.94 percent, at 73,018.66 by 9:35 am, after closing at 73,709.69 in the previous session. The NSE Nifty 50 opened at 22,687.75 and slipped 230.90 points, or 1.01 percent, to 22,580.45. Only two stocks on the Nifty 50—Eternal and Infosys—opened in positive territory, rising 1.90 percent and 0.09 percent, respectively.

On the losing side, Coal India led the declines, falling 2.82 percent, followed by Power Grid Corporation, Nestle India, Bharat Electronics Limited (BEL), and Hindalco Industries. Chemical, Metal, Auto, Realty, and Defense stocks remained under pressure. Broader markets continued to suffer losses, with the Nifty Midcap 100 dropping 1.60 percent to a six-month low and the Nifty Smallcap 100 plunging 2.40 percent to a four-month low.

The market downturn followed escalating supply-disruption fears as Houthi rebels attacked a Saudi Aramco oilfield overnight. Consequently, Brent crude traded at $110.69 a barrel, up 1.72 percent, while WTI crude stood at $98.52. On the Multi Commodity Exchange, November crude futures rose 1.47 percent to ₹9,343, and December futures climbed 1.41 percent to ₹9,195. In response to the security situation, the United States ordered its diplomats to leave Saudi Arabia.

Asian markets mirrored the negative sentiment. South Korea's KOSPI fell 2.1 percent, Hong Kong's Hang Seng declined 2 percent, and Japan's Nikkei 225 slipped 0.7 percent below 64,000. GIFT Nifty traded down 74 points at 22,654 ahead of the opening bell. Conversely, Wall Street closed higher on Wednesday, supported by technology stocks and SpaceX's 161 percent year-on-year revenue growth, which sent its shares up 7 percent. The US 10-year Treasury yield stood at 5.123 percent.

Despite the broader market slide, institutional activity remained steady. On Wednesday, Foreign Institutional Investors (FIIs) were net buyers of equities worth ₹1,022 crore, and Domestic Institutional Investors (DIIs) made net purchases of ₹1,614 crore. The Indian rupee extended its winning streak to eight consecutive sessions, gaining 47 paise to close at a four-month high of 94.46.

Market participants are also monitoring several corporate developments. Robust demand for the Jio Platforms IPO on Day 1 absorbed secondary market liquidity, while quarterly results from companies including Adani Enterprises, Colgate, Havells, HPCL, Nam India, Sagility, and Swiggy are scheduled for release during the day. Stocks to watch include Sagility India, Tata Communications, Bharat Electronics, Omnitech, PDS, and SEAMEC.

Market analysts noted that external pressures continue to dictate market direction. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, observed that strong external headwinds from elevated crude prices and high US bond yields are enabling bears to build short positions, explaining the market decline despite positive institutional buying. Hariselvan Radhakrishnan, Founder and CEO of HST Wealth, added that unless crude and bond yields retreat meaningfully, opening declines may only attract tactical buying rather than a durable market reversal.

"The sharp correction in Indian equity benchmarks highlights how heavily dependent domestic market sentiment is on external macroeconomic factors like crude oil prices and geopolitical developments. While institutional participation and strong IPO demand reflect underlying liquidity, businesses and investors must exercise caution during periods of high volatility driven by global supply chain disruptions and shifting bond yields." — Dr. Shishir Gupta, Founder & CEO, StartupLanes