New Delhi: Indian equity markets came under heavy selling pressure in early trade on Wednesday, September 2, as renewed tensions between the US and Iran pushed crude oil prices higher and raised fresh concerns over inflation and interest rates. The Sensex fell more than 600 points, while the Nifty slipped below the 24,000 mark soon after the opening bell.

At 9:33 am, the BSE Sensex was down 612.09 points, or 0.80 per cent, at 76,332.19. The index had opened at 76,471.32, compared with Tuesday’s close of 76,944.28, and moved between an early high of 76,521.67 and a low of 76,135.72.

The Nifty 50 was down 228.45 points, or 0.95 per cent, at 23,827.35. It opened at 23,858 and touched an early high of 23,882.95 before falling to a low of 23,786.80.

US-Iran tensions trigger risk-off mood

The latest market weakness came after the US and Iran exchanged strikes overnight, escalating concerns about the broader geopolitical situation in the Middle East.

The developments pushed crude oil prices higher as investors worried about possible disruptions to energy supplies. Brent crude rose around 1 per cent to $95.40 a barrel after touching a near six-week high earlier in the session.

Higher crude prices are particularly important for India because the country imports a large portion of its oil requirements. A prolonged increase in crude prices can raise the import bill and put pressure on inflation, the rupee, corporate costs and the country’s trade balance.

The rise in oil prices has also complicated the global interest-rate outlook. Investors are concerned that higher energy prices could make it harder for central banks to bring inflation down, potentially keeping interest rates elevated for longer.

All major sectoral indices in the red

The selling was broad-based, with all major sectoral indices trading lower during early Wednesday trade.

The Nifty Auto index was the biggest sectoral loser, falling 2.03 per cent. Nifty Realty declined 1.88 per cent, while Nifty IT dropped 1.62 per cent.

Nifty Media fell 1.44 per cent, Nifty Financial Services declined 1.03 per cent and Nifty FMCG slipped 0.92 per cent. Nifty Metal was down 0.95 per cent, while Nifty Oil & Gas declined 0.67 per cent.

Pharma and healthcare stocks showed relatively better resilience. Nifty Pharma fell 0.28 per cent and Nifty Healthcare declined 0.31 per cent.

Private banking stocks also remained under pressure, with Nifty Private Bank down 0.64 per cent and Nifty PSU Bank declining 0.51 per cent.

Broader market also faces pressure

The weakness was not limited to the benchmark indices. Broader market indicators also declined sharply during early trading.

Nifty 100 fell 1 per cent, while Nifty 200 and Nifty 500 declined 1.04 per cent and 1.02 per cent respectively.

The mid-cap segment came under additional pressure. Nifty Midcap 50 dropped 1.23 per cent, while Nifty Midcap 100 declined 1.20 per cent. The Nifty Smallcap 100 was down 0.85 per cent.

The India VIX, commonly referred to as the market’s fear gauge, rose 4 per cent to 11.95, signalling an increase in market volatility.

IndiGo among major losers

Among individual stocks, IndiGo emerged as one of the biggest losers in the broader list, falling 2.50 per cent during early trade.

Eternal declined 1.78 per cent, while Infosys fell 1.57 per cent. HCL Technologies dropped 1.55 per cent and UltraTech Cement declined 1.53 per cent.

M&M fell 1.50 per cent, while Asian Paints, BEL, TCS, HDFC Bank, Bajaj Finance and Maruti were also among the major laggards.

Within the Sensex pack, Sun Pharma was the top gainer, rising 0.49 per cent. Adani Ports also managed a marginal gain of 0.09 per cent. However, several other major constituents, including Kotak Mahindra Bank, Power Grid, ICICI Bank and Larsen & Toubro, traded lower.

Global markets add to pressure

Indian equities were also affected by weakness across Asian markets as investors assessed the impact of the latest escalation in the Middle East.

Global bond yields moved higher amid expectations that rising oil prices could make the fight against inflation more difficult. This has raised concerns that central banks could delay interest-rate cuts or maintain restrictive monetary conditions for longer.

For emerging markets such as India, higher global yields can also affect foreign investment flows and increase pressure on domestic financial markets.

The combination of geopolitical uncertainty, expensive crude oil and rising global yields therefore created a risk-off environment at the start of Wednesday’s session.

Crude oil remains the key market trigger

The movement in crude oil prices is likely to remain an important factor for Indian markets in the near term.

India’s dependence on imported crude means that a sustained rise in oil prices can affect several areas of the economy simultaneously. Higher fuel and transportation costs can increase input expenses for companies, while a larger import bill can put pressure on the rupee and inflation.

Investors are therefore watching developments in the Middle East closely. Any further escalation could lead to additional volatility in crude prices and equity markets, while signs of de-escalation could ease some of the immediate pressure.

For now, Wednesday’s opening reflects heightened caution among investors rather than a change in India’s underlying economic fundamentals. The market direction through the rest of the session will depend on global cues, crude oil movements, geopolitical developments and institutional flows.