Sensex, Nifty trade lower as US strikes on Iran spike crude oil prices

Indian equity benchmarks made negative start on Wednesday tracking weakness in global markets. Sensex and Nifty were trading lower with cut of over 0.60% each in early deals as investors booked profits after recent rally. Traders were cautious amid spike in crude prices after United States military launched a new attack on Iran and cancelled the license to sell oil after three tankers were hit by projectiles in the Strait of Hormuz putting pressure on the delicate ceasefire. Though, downside was limited amid foreign fund inflows as foreign institutional investors (FIIs) remained net buyers, purchasing equities worth Rs 393.19 crore on Tuesday. Traders took note of the data released by United Nations Trade and Development (UNCTAD) stating that Foreign Direct Investment (FDI) inflows to India increased by 44 per cent in 2025 to $39 billion. It said the country continued to strengthen its position as a major investment destination.

On the global front, Asian markets were trading mixed amid selloff in artificial intelligence related shares as market participants turned cautious about their expensive valuations. Back home, airline stocks were in focus as DGCA said that Indian airlines carried 1.53 crore domestic passengers in May, over 11 per cent higher than 1.38 crore people flown in April.

The BSE Sensex is currently trading at 77689.02, down by 491.70 points or 0.63% after trading in a range of 77555.52 and 77850.46. There were 5 stocks advancing against 24 stocks declining, while 1 stock remain unchanged on the index.

The sole gaining sectoral index on the BSE was Healthcare up by 0.21%, while Oil & Gas down by 1.46%, Energy down by 1.22%, FMCG down by 1.07%, Auto down by 1.02% and Consumer Durables down by 0.78% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 0.34%, Tech Mahindra up by 0.15%, ICICI Bank up by 0.14%, HCL Technologies up by 0.09% and HDFC Bank up by 0.08%. On the flip side, Asian Paints down by 2.72%, ITC down by 1.96%, Interglobe Aviation down by 1.93%, Reliance Industries down by 1.74% and Hindustan Unilever down by 1.52% were the top losers.

Meanwhile, the United Nations Trade and Development (UNCTAD), in its ‘2026 World Investment Report’ has said that foreign direct investment (FDI) inflows into India increased by 44 per cent to $39 billion in 2025. The report stated that ‘India continued to strengthen its position as a major investment destination in 2025, supported by an active policy agenda aimed at broadening its investment base beyond services and accelerating advanced manufacturing.’

It noted that to attract investment into priority industries such as electronics, semiconductors, and related manufacturing activities, India launched programmes including the Production-Linked Incentive (PLI) schemes, Make in India, Start-up India, and the National Industrial Corridor Development Programme. Citing data from the Reserve Bank of India, the Ministry of Commerce and Industry, and the World Bank, the report said these initiatives have been complemented by reforms aimed at creating a more conducive investment environment, including the National Single Window System, the India Industrial Land Bank, and continued efforts to reduce regulatory burdens.

The report added that the reformed FDI regime has reinforced openness to foreign investors, while institutional mechanisms such as Project Development Cells and the Project Monitoring Group have helped facilitate approvals and project implementation. It noted that these efforts have contributed to strengthening investment momentum, including in manufacturing. It added that announced greenfield investment in manufacturing increased sharply between 2021 and 2024, reflecting India's growing role in selected segments of global value chains (GVCs), including electronics.

However, the report noted that this trend was disrupted in 2025 by a more uncertain global environment. Although total FDI inflows rose to $39 billion, project indicators pointed to a more cautious investment cycle. The total value of announced greenfield investments declined from more than $111 billion in 2024 to about $74 billion in 2025, while the number of projects fell marginally. The slowdown was concentrated in manufacturing, where the value of announced investments dropped from about $65 billion in 2024 to $27 billion in 2025. The decline was most pronounced in capital-intensive sectors, where investment values fell significantly. In many cases, the number of projects declined only moderately, suggesting smaller project sizes rather than fewer investment commitments.

The CNX Nifty is currently trading at 24248.90, down by 149.80 points or 0.61% after trading in a range of 24207.20 and 24295.25. There were 14 stocks advancing against 35 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Wipro up by 0.95%, Dr. Reddy's Lab up by 0.86%, ONGC up by 0.58%, Hindalco Industries up by 0.55% and Cipla up by 0.50%. On the flip side, Shriram Finance down by 2.68%, JIO Financial Services down by 2.61%, Asian Paints down by 2.54%, Eicher Motors down by 2.15% and Reliance Industries down by 1.93% were the top losers.

Asian markets were trading mixed; Nikkei 225 slipped 465.96 points or 0.68% to 67,791.00, KOSPI dropped 297.25 points or 3.88% to 7,359.06, Taiwan Weighted lost 76.64 points or 0.17% to 45,402.47 and Jakarta Composite plunged 56.58 points or 0.95% to 5,929.92. On the other hand, Hang Seng rose 523.11 points or 2.18% to 24,020.00, Straits Times gained 59.79 points or 1.12% to 5,402.03 and Shanghai Composite was up by 20.81 points or 0.52% to 4,011.05.