The Indian stock market remained under pressure for a third consecutive session on Wednesday, September 2, with the benchmark indices breaking below key levels as renewed fighting in the Middle East pushed oil prices higher, stoking inflation concerns and expectations of tighter monetary policy.
Elevated crude oil prices also drove global bond yields to multi-year highs, while a weak global market setup further weighed on investor sentiment.
Indian stock market today
The Nifty 50 closed 0.59% lower at 23,914. The index had earlier plunged to an intraday low of 23,786 before late-session buying helped it recover a large part of its losses.
The Sensex ended 0.62% lower at 76,469 after falling to a one-month low during intraday trade. The selling pressure extended to the broader market, with the Nifty Midcap 100 and Nifty Smallcap 100 declining 0.53% and 0.37%, respectively.
Renewed geopolitical tensions were a key driver behind the market sell-off, as the conflict between Iran and the US escalated. The US military reportedly launched fresh strikes against Iranian targets around the Strait of Hormuz, which President Donald Trump said were in retaliation for Tehran’s alleged attempts to lay mines in the strategic waterway and an earlier attack on a US military base.
Iran reportedly retaliated by launching attacks on US allies in the Gulf early on Wednesday. After a respite of more than a month, fighting between the US and Iran intensified over the weekend after the American military struck Iranian rocket launchers on an island in the Strait of Hormuz, saying Iran was planning to use them to deploy mines in the waterway.
The latest escalation added further pressure to crude oil prices, with Brent crude hovering near its highest level in almost six weeks amid concerns that the conflict could further disrupt energy flows through the strategically important waterway.
Higher oil prices also pressuring bond markets. Rising crude prices have pushed global yields to their highest levels since 2008 as traders increased bets that the Federal Reserve and other central banks could raise interest rates to contain inflation.
