Indian equity markets suffered their steepest decline since March on Wednesday, with the benchmark Nifty 50 index falling more than 2% to 23,882.
The sell-off was driven by a resurgence of geopolitical tensions in the Middle East, which sent crude oil prices sharply higher and spooked investors across emerging markets.
The BSE Sensex mirrored the downturn, sliding 2.15% to close at 76,503.6.
This marks the biggest one-day loss for Indian benchmarks in three months, erasing weeks of gains that had been fueled by hopes of easing global trade tensions and stable energy costs.
The sharp reversal highlights the vulnerability of India’s equity markets to external supply shocks, particularly given the country’s heavy reliance on imported oil.
Brent crude prices surged in the session, reflecting ongoing shipping risks in the Strait of Hormuz.
Earlier this week, Iran threatened a forceful response to tankers deviating from approved routes, deepening uncertainty over energy supply chains. The combination of higher input costs and geopolitical anxiety prompted a broad-based sell-off, with energy-intensive sectors and consumer discretionary stocks leading the decline.