Indian shares extend fall as widening Mideast conflict fuels oil surge

Mar 4, 2026, 11:52 GMT+7
By Bharath Rajeswaran
Indian shares extended their slump on Wednesday, with the rupee falling to a record low , as escalating U.S.-Israel clashes with Iran pushed oil to a 19-month high and dragged global markets lower on fears of a prolonged Middle East conflict.
The Nifty 50fell 2.25% to a 10-month low of 24,305.4 and the BSE Sensexshed 2.24% to an 11-month low of 78,443.2 as of 10:10 a.m. IST.
Domestic markets were closed on Tuesday for a local holiday. The benchmarks have lost about 2.5% each over the past two sessions.
Other Asian markets slid 4.3%, while Wall Street closed lower overnight on worries that a wider Mideast war could deliver an energy shock that raises inflation and delays rate cuts.
Brent crude futures!rose or 1.4% to $82.57 a barrel by 0408 GMT, after closing at its highest since January 2025 on Tuesday. They have gained nearly 17% in four sessions.
Higher oil prices and trade disruptions weigh on large importers of the commodity such as India.
"For India, any sharp spike in oil prices has implications for current account deficit, fiscal deficit and inflation, while also placing downward pressure on the rupee," Macquarie analysts, led by Suresh Ganapathy, said.
U.S. and Israeli forces struck Iran for a fourth straight day, while Iranian drones and missiles hit Gulf oil refineries and targeted U.S. embassies in Saudi Arabia and Kuwait.
Back home, 15 of the 16 major sectors logged losses on Wednesday. The broader small-and mid-capslost 2.1% each.
The Nifty India volatility indexjumped to 20.98, its highest level since May 2025, indicating a spike in investor anxiety.
Nifty heavyweights HDFC Bankand ICICI Banklost 1.1% and 1.7%, respectively, while oil-to-telecom conglomerate Reliance Industries!fell 2.5%.
"Markets have opened lower as leveraged positions are unwound amid the geopolitical developments of the past two days," said Devarsh Vakil, head of prime research at HDFC Securities.
Among stocks, Larsen and Toubro,which has significant exposure to the Middle East region, tumbled 7.2%, after losing 5% in the previous session.
Oil marketing companies, such as Bharat Petroleum Corporation, Hindustan Petroleum Corporationand Indian Oil Corporationlost about 4% each. Paint makers, including Asian Paintsand Kansai Nerolac, shed 2.5% each on a surge in crude prices.
Tyre makers such as MRF, JK Tyreand Ceatlost 1.5%-3.3%.
Airline operator Interglobe Aviationdipped 4.8% as the conflict forced domestic carriers to cancel flights to the Middle East and parts of Europe.
"If these cancellations persist for seven days, we estimate they will erase about 320 million rupees of Indigo's profit before tax, equal to about 6% of profit before tax in the fourth quarter," HSBC analysts, led by Parash Jain, said.

Sumber : Reuters