Geopolitical Tensions Shake Indian Stock Markets

The escalation of geopolitical tensions between the United States and Iran sent shockwaves across global markets, with Indian indices taking a significant hit. A broad-based sell-off on Thursday saw the Sensex dive 1,236 points while the Nifty settled near 25,450, breaking a three-day winning streak.

Vinod Nair, Head of Research at Geojit Investments Ltd, attributed the market's sharp decline to heightened volatility, driven by Brent crude prices reaching their highest levels this year. Concerns over inflation surged as fears grew surrounding potential disruptions in the Strait of Hormuz, a crucial oil passageway.

In addition to geopolitical factors, uncertainty regarding the US Federal Reserve's interest rate trajectory and continued pressure on the Indian rupee contributed to the market's downturn. Compounding the situation was the absence of active foreign institutional investment due to regional holidays in Asia and a banking holiday in India.