Indian stocks drop on Iran strikes, crude surge hits auto and banks
Escalating US military strikes on Iran drove Brent crude above $85 a barrel, dragging Indian equities lower as investors weighed the inflationary threat to the world’s third-largest oil importer.
Indian benchmark indices fell on Tuesday as a sharp rise in global oil prices triggered a broad sell-off. By 9:48 IST, the Nifty 50 had declined 0.54% to 24,076.10, while the BSE Sensex dropped 0.62% to 77,141.40. The declines came as Brent crude briefly climbed above $85 per barrel, a level not seen since a June 17 memorandum of understanding between the US and Iran.
The price surge followed a third consecutive night of US military strikes on Iran. President Donald Trump intensified the geopolitical pressure by reinstating restrictions on Iranian shipping and proposing a 20% fee on cargo transiting the Strait of Hormuz.
For India, higher crude prices represent a direct macroeconomic threat. As the world’s third-largest oil importer, the country faces an increased import bill that widens both its current account and fiscal deficits. The added inflationary pressure also threatens to squeeze corporate profit margins across the broader economy.
The selling pressure was largely broad-based, with 12 of the 16 sectoral indices trading in the red. Automakers bore the brunt of the move, with the Nifty Auto index slipping 1.6% on fears of rising fuel and input costs. Heavyweight financial and banking stocks also led the decline, with both sectors falling 1.2%. The Nifty Midcap 100 and Nifty Smallcap 100 indices each lost around 0.6%.
Despite the morning weakness, the underlying technical tone for the Indian market has shown recent resilience. The Nifty 50 recovered from a sharp gap-down earlier in the week to break back above the 23,800 level, though market participants are now waiting for a cross above 24,300 before building aggressive long positions. The Bank Nifty has erased a 1,500-point loss from the previous week, with analysts viewing dips toward its 200-day moving average of 57,200 as buying opportunities with upside targets of 58,000 to 58,500.
Against this volatile backdrop, Sagar Doshi of Nuvama highlighted three domestic stocks demonstrating bullish technical setups: Anant Raj Ltd, Sobha Ltd, and PNB Housing Finance Ltd. While the specific chart patterns varied, the selections shared common traits of breaking prolonged downward trendlines and moving decisively above 200-day moving averages, signaling the end of corrective phases and the potential for sustained upside.
