The headline equity indices ended with major losses on Thursday, snapping a three-day winning streak, as weak global cues and heightened risk aversion weighed on sentiment. The decline was driven by surging crude oil prices amid escalating Middle East tensions, fuelling inflation concerns. Sentiment was further hit after the US Federal Reserve kept rates unchanged while maintaining a cautious stance. Heavy selling in index heavyweight HDFC Bank, along with persistent FII outflows, added to the downside pressure. The Nifty ended below the 23,050 mark.
In the barometer index, the S&P BSE Sensex tanked 2,496.89 points or 3.26% to 74,207.24. The Nifty 50 index plunged 775.65 points or 3.26% to 23,002.15. In the past three consecutive trading sessions, the Sensex and Nifty climbed 2.87% and 2.71% respectively.
The broader market outperformed the frontline indices. The BSE 150 MidCap Index dropped 3.04% and the BSE 250 SmallCap Index fell 2.58%. The market breadth was weak.
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, zoomed 21.79% to 22.80.
Among the sectoral indices, the OIL & GAS index (down 1.98%), the Nifty Pharma index (down 2.35%) and the Nifty FMCG index (down 2.53%) outperformed the Nifty 50 index.
Meanwhile, the Nifty Auto index (down 4.25%), Nifty Realty index (down 3.81%) and the Nifty Financial Services index (down 3.76%) the underperformed the Nifty 50 index.
West Asia Conflict:
The Middle East war continues to escalate, keeping investors on edge. US President Donald Trump on Wednesday warned that Iran’s key South Pars gas field could be destroyed if there are any further attacks targeting Qatar’s main gas facility. The warning came as Qatar said Iranian missile strikes had caused extensive damage to Ras Laffan Industrial City, the world’s largest LNG export facility.
Israeli Defense Minister Israel Katz said “significant surprises” are ahead after Iran’s intelligence minister Esmail Khatib was killed in an overnight strike. Iran condemned the attack on its South Pars gas field, with President Masoud Pezeshkian warning of “uncontrollable consequences” that could “engulf the entire world.”
Numbers to Track:
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 92.8900 compared with its close of 92.4000 during the previous trading session.
MCX Gold futures for the 2 April 2026 settlement fell 3.77% to Rs 147,255.
The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.07% to 99.94.
The United States 10-year bond yield rose 0.45% to 4.277.
In the commodities market, Brent crude for May 2026 settlement jumped $ 6.66 or 6.20% to $114.04 a barrel.
Global Markets:
European markets traded lower on Thursday as the Iran war escalates following attacks on Iranian and Qatari energy infrastructure.
The European Central Bank and the Bank of England are expected to keep interest rates unchanged, maintaining a cautious stance amid rising inflation risks and geopolitical uncertainty.
The Swiss National Bank also held its policy rate at 0% and signaled readiness to intervene in currency markets, while inflation remains subdued but may rise due to higher energy prices.
Meanwhile, the UK unemployment rate remained steady at 5.2%, with employment rising and economic inactivity declining.
Asian markets ended in red, tracking losses on Wall Street that saw the Dow Jones Industrial Average touch a new closing low for the year.
The Bank of Japan kept the interest rates steady at 0.75% but noted that inflation risks now are tilted to the upside due to the Iran war.
Malaysia’s annual inflation eased to 1.4% in February 2026 from 1.6% in January, coming in below market expectations of 1.6% and marking the lowest level since November. The moderation was driven by slower price increases across key segments, including food, health, and education. Core inflation also softened to 2% from 2.3%, the lowest in six months. On a monthly basis, consumer prices rose 0.2% in February, compared with a 0.1% rise in the previous month.
In the commodities market, Brent crude for May 2026 settlement rallied $3.85, or 3.59% to $111.23 a barrel.
Overnight in the U.S., the 30-stock Dow Jones Industrial lost 1.63%, ending at 46,225.15, reaching a new low this year. The index also closed below its 200-day moving average. The S&P 500 fell 1.36%, while the Nasdaq Composite dropped 1.46%.
The Federal Reserve held its key policy rate steady at 3.5% to 3.75%, with Chair Jerome Powell watering down rate-cut expectations, saying that inflation was not coming down as much as ‘hoped.’
The U.S. central bank’s “dot plot” projects a cut in 2026 and another in 2027, even though the timing is unclear.
The producer price index—which tracks the change in wholesale prices—rose 0.7% in February, well above the 0.3% that economists polled by Dow Jones had estimated.