Key indices witness sharp sell-off amid renewed US-Iran tensions

Indian equity benchmarks witnessed a sharp sell-off and ended over 2 per cent lower on Wednesday as US President Donald Trump declared the interim peace deal with Iran is 'over' following Iranian attacks on commercial vessels in the Strait of Hormuz, reigniting geopolitical tensions and raising fresh concerns over global energy supplies.  

Some of the important factors in trade:

FDI inflows into India surge by 44% in 2025 amid policy push, focus on manufacturing: 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. 

NBFC lending against gold jewellery witnesses 70% growth in May: The Reserve Bank of India (RBI) in its latest report has said that outstanding credit extended by non-banking financial companies (NBFCs) against gold jewellery witnessed the fastest growth among all lending segments in May 2026, surging nearly 70 per cent year-on-year.

Guaranteed credit under ECLGS 5.0 reaches Rs 1.55 lakh crore: The Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 has witnessed strong traction since its rollout, with 4,11,497 guarantees issued and the guaranteed amount touching Rs 1,55,229 crore, underscoring its widespread adoption across the financial sector.

Ailine stocks remain in watch: The Directorate General of Civil Aviation (DGCA) in its latest report has said that Indian airlines recorded domestic passenger traffic of 1.53 crore in May 2026, compared with 1.38 crore in April, reflecting growth of over 11 per cent. The figure was also 9.49 per cent higher than in May 2025. 

Global front: European markets were trading lower as renewed U.S.-Iran tensions drove up crude oil prices, threatening inflation outlook and giving rise to Fed rate hike expectations. Asian markets ended mixed with tech shares coming under selling pressure amid concerns that the AI-fueled rally in chipmakers may be losing momentum. 

Finally, the BSE Sensex fell 1677.12 points or 2.15% to 76,503.60 and the CNX Nifty was down by 516.65 points or 2.12% to 23,882.05. 

The BSE Sensex touched high and low of 77,851.18 and 76,259.03, respectively. All the 30 stocks were declining on the index.      

The top losing sectoral indices on the BSE were FMCG down by 2.54%, Bankex down by 2.46%, Auto down by 2.25%, Oil & Gas down by 1.96% and Realty down by 1.89%, while there was no gaining sectoral index on the BSE.

The top losers on the Sensex were Interglobe Aviation down by 5.02%, Maruti Suzuki India down by 4.11%, Hindustan Unilever down by 3.36%, Bajaj Finance down by 3.08% and Kotak Mahindra Bank down by 2.93%, while there was no gainer on the Sensex. 

Meanwhile, the Reserve Bank of India (RBI) in its latest report has said that outstanding credit extended by non-banking financial companies (NBFCs) against gold jewellery witnessed the fastest growth among all lending segments in May 2026, surging nearly 70 per cent year-on-year. Outstanding gold loans rose to Rs 3.29 lakh crore at the end of May 2026 from Rs 1.94 lakh crore a year earlier, reflecting a growth of 69.9 per cent. 

Within the retail loan portfolio, housing loans, vehicle loans, and loans against gold jewellery recorded healthy growth, driving overall retail credit growth to 19.5 per cent year-on-year in May, compared with 14.9 per cent in the same month last year.  Besides gold loans, outstanding credit extended by NBFCs to the commercial sector registered the second-highest growth, increasing 40.2 per cent year-on-year to Rs 1.19 lakh crore in May from Rs 85,317 crore in May 2025.   

Credit to agriculture and allied activities also remained robust, rising 17.9 per cent year-on-year in May 2026, significantly higher than the 5.0 per cent growth recorded in the corresponding period last year. However, lending to the industrial sector slowed to 7.3 per cent in May from 10.0 per cent a year ago, mainly due to weaker growth in infrastructure financing. Similarly, credit growth to the services sector also moderated, easing to 16.7 per cent year-on-year in May from 23.9 per cent in the corresponding month of 2025.

CNX Nifty touched high and low of 24,300.00 and 23,805.20, respectively. There were 4 stocks advancing against 46 stocks declining on the index.    

The top gainers on Nifty were ONGC up by 1.15%, Bajaj Auto up by 0.65%, Hindalco Industries up by 0.42% and Coal India up by 0.40%. On the flip side, Interglobe Aviation down by 5.10%, JIO Financial Services down by 5.02%, Shriram Finance down by 4.86%, Maruti Suzuki India down by 3.88% and Hindustan Unilever down by 3.36% were the top losers.  

European markets were trading lower; UK’s FTSE 100 decreased 149.87 points or 1.41% to 10,516.01, France’s CAC fell 170.54 points or 2.02% to 8,265.70 and Germany’s DAX lost 502.35 points or 1.97% to 24,962.90. 

Asian markets ended mixed on Wednesday, tracking Wall Street’s overnight decline amid concerns that the AI-fuelled rally in chipmakers may be overstretched, while investors awaited the release of minutes from last month's Federal Reserve meeting. Furthermore, surging crude oil prices and renewed US-Iran tensions added pressure on sentiment following a fresh round of US airstrikes on Iran. The strikes targeted more than 80 locations in response to Iranian attacks on three commercial vessels in the Strait of Hormuz. At the NATO summit in Ankara, US President Trump officially declared an interim peace deal with Iran ‘over’, calling continued talks with Tehran a waste of time. Meanwhile, South Korea's benchmark Kospi Index officially entered a bear market after plunging over 20% from its June record highs.