The BSE Sensex slumped over 900 points, to the day’s low of 81,605.82 around 2:06 PM, meanwhile, the NSE Nifty fell nearly 250 points to slip below the 24,900 level. The market capitalisation of all listed companies on the BSE shrank by Rs 4.19 lakh crore to Rs 451 lakh crore, reflecting broad-based selling across sectors.
Below are the key factors weighing on sentiment:
1) Middle East tensions escalate
Investors turned risk-averse following a string of developments pointing to a deteriorating security situation in the Middle East.U.S. President Donald Trump said on Wednesday US personnel were being moved out of the Middle East because “it could be a dangerous place,” adding that the United States would not allow Iran to have a nuclear weapon.
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Reuters reported that the U.S. is preparing a partial evacuation of its embassy in Iraq and will allow military dependents to leave locations across the region due to rising threats, citing both American and Iraqi officials.
The timing is particularly sensitive as, according to U.S. intelligence, Israel is reportedly preparing for a potential strike on Iran’s nuclear facilities. At the same time, Iranian Defence Minister Aziz Nasirzadeh warned that “if Iran was subjected to strikes it would retaliate by hitting U.S. bases in the region.”
Regional markets mirrored the tension. Saudi Arabia’s benchmark index fell 1.3%, dragged down by heavyweights like Al Rajhi Bank, which slipped 0.6%, and Saudi Aramco, which was down 0.4%. Dubai’s main share index recorded its steepest intraday fall since April, losing 1.7%, with Emaar Properties tumbling 3%.
2) Fresh trade tariff uncertainty
Adding another layer of unease to already jittery markets, U.S. President Donald Trump said the United States would send out letters within one to two weeks outlining the terms of new trade deals to dozens of countries, which they could either “embrace or reject.”
Despite a tentative framework agreement between the U.S. and China earlier this week, the lack of detail and Trump’s tariff warning contributed to a risk-off mood in global markets.
“Also President Trump has declared that he will be sending letters to trade partners in the next two weeks setting universal tariffs. Market participants will be waiting and watching for clarity on this. The tariff crisis is not yet over,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
3) Global markets slip as risk sentiment sours
World equities declined on Thursday, adding to the pressure on Indian markets, as investors digested a mix of soft U.S. inflation data, lingering tariff concerns, and fragile geopolitical dynamics.
European equities looked set for a weak open, with futures on Germany’s DAX and London’s FTSE 100 down 0.8% and 0.4%, respectively. Futures on the S&P 500 also indicated a flat to lower start on Wall Street.
In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.2% after hitting a three-year high the previous day. Japan’s Nikkei fell 0.5%, while Chinese and Hong Kong stocks also retreated after recent gains.
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