3 min readMumbaiUpdated: Mar 11, 2026 09:23 PM IST
The Indian stock market fell further on Wednesday as market participants remained jittery as the war in West Asia continued despite comments from the US administration earlier this week that the conflict could be “over soon.” After rising on Tuesday, the benchmark Sensex and Nifty 50 stock indices fell 1.7% and 1.6%, respectively, on Wednesday and are in the red by more than 5% since February 27. So far this week, the Sensex is down 2.6%, while the Nifty 50 has fallen 2.4%.
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“The ongoing rise in crude oil prices and the choking supply of natural gas (has) sent shockwaves through the Indian equity market,” said Rupak De, senior technical analyst at LKP Securities. “Mixed signals” over the US and Israel’s war with Iran has left investors “uncertain about the potential impact on global inflation and economic growth”, analysts at Bajaj Broking noted, adding that “volatility is likely to remain elevated amid uncertain global cues, rising crude price and escalating geo-political tension”.
After surging close to $100 per barrel, crude oil prices have retreated but were back above $90/barrel on Wednesday despite reports the International Energy Agency is set to suggest the release of as much as 400 million barrels of oil – the largest in its history – to contain the rise in global oil prices.
On Wednesday, the Nifty 50 closed below the psychologically crucial mark of 24,000 for the first time since April 17, 2025 after having opened marginally higher. However, it proceeded to slip lower through the rest of trade, led by stocks of banking and financial services companies, with the likes of Bajaj Finance, Bajaj Finserv, and Axis Bank falling as much as 5%. The Nifty Bank lost over 2% and was the worst-hit among the NSE’s sectoral indices.
Automobile stocks were also among the major laggards. Barring oil and gas, healthcare, and pharma, all other sectoral indices of the NSE closed lower on Wednesday. Index heavyweight Reliance Industries rose as high as 1.8% in the first few minutes of trade after President Donald Trump said late on Tuesday that the Indian oil major will invest in the US’ first “major oil refinery” in 50 years. However, shares of RIL ended 1.3% lower on Wednesday.
Like the Nifty 50, the Sensex also ended on Wednesday at its lowest closing level in nearly a year.
The outflow of foreign capital continued to weigh on stock markets. After February saw a reversal, with inflows to the turn of $2.5 billion on a net basis coming into the equity market, March has so far seen net outflow of $4.3 billion of foreign money. In January, Foreign Portfolio Investors had sold Indian shares worth $4 billion.
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According to VK Vijaykumar, chief investment strategist at Geojit Financial Services, the “FII vs DII game” is back to the pattern seen in the last year. “Sustained FII selling has made large banking stocks, which constitute the largest segment of FII’s AUM (assets under management) attractive. These stocks have the potential to reward investors who can buy and hold them for at least two years. Here patience is the key. The decline in Brent crude to below $88 (per barrel) will improve the risk-on sentiment in the market.”
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