The turbulence that first shook capital markets is now spreading across the broader financial system. Sharp declines in currencies and government bonds are dragging equity markets lower, while Asian markets opened deep in the red today. US futures are also trading weak, intensifying fears that financial instability could spill over into the real economy, triggering persistent inflation and tighter monetary conditions.
In derivatives trading at GIFT City, Gift Nifty closed at 23,522 on Tuesday night before falling to 23,405 this morning, indicating that Indian equities are likely to open sharply lower today.
The West Asian conflict continues to keep crude oil prices elevated, with little indication of any sustained correction. Concerns are growing that a renewed escalation in the war could push prices even higher. Crude reserves across several countries are steadily declining, adding further pressure to energy markets.
Persistently high oil prices are expected to fuel inflation globally, forcing central banks, including the US Federal Reserve, to maintain higher interest rates for longer. These fears have already triggered a sell-off in bond markets.
US 10-year Treasury yields climbed to 4.679 percent, while 30-year Treasury yields rose to 5.19 percent as bond prices fell sharply. Rising inflation and elevated interest rates are expected to squeeze economic growth, weighing heavily on equity markets across both developed and emerging economies.
Asian economies are also grappling with weakening currencies. The Japanese yen, Indian rupee, South Korean won, Philippine peso and Indonesian rupiah have all come under pressure in recent days.
Wall Street closed sharply lower on Tuesday amid concerns over inflation and rising interest rates.
The Dow Jones Industrial Average declined 322.24 points, or 0.65 percent, to close at 49,363.88. The S&P 500 lost 49.44 points, or 0.67 percent, to end at 7,353.61, while the Nasdaq fell 220.02 points, or 0.84 percent, to settle at 25,870.71.
US index futures continued to trade lower this morning. Dow futures slipped 140 points, or 0.28 percent, while S&P 500 futures lost 18 points, or 0.22 percent. Nasdaq futures were down 52 points, or 0.18 percent.
Among Indian ADRs traded in New York on Tuesday:
HDFC Bank ADR fell 1.50 percent during regular trading, but rebounded 1.98 percent in after-hours trade to $24.74.
ICICI Bank ADR declined 2.36 percent before recovering 0.55 percent in extended trade to close at $25.39.
Infosys ADR rose 1.03 percent and gained another 0.79 percent in after-hours trade to finish at $12.82.
Wipro ADR slipped 0.52 percent before recovering by the same margin to close at $1.94.
European markets closed mixed on Tuesday. Germany’s benchmark index advanced while France’s index declined. UK unemployment rose to 5 percent.
Germany also decided to privatise energy group Uniper, which had been taken over by the government in 2022 to prevent bankruptcy.
Asian markets remained under pressure this morning. Japan’s Nikkei fell 1.80 percent, while South Korea’s Kospi declined 2 percent. The Kospi has lost nearly 10 percent over the past five trading sessions. Australia’s benchmark index slipped 0.80 percent. Hong Kong’s Hang Seng was down 0.75 percent, while Shanghai declined 0.45 percent.
Indian markets, which traded firmly higher during the morning session on Tuesday, reversed sharply in the final hour and ended marginally lower. While benchmark indices closed with small losses, the broader market remained strong with gains of more than 1 percent.
IT, realty, media, consumer durables, pharma, healthcare and auto stocks advanced, while banking and financial shares declined.
Foreign institutional investors, who had been net buyers for three consecutive sessions, turned sellers again on Tuesday, offloading shares worth ₹2,457.49 crore in the cash market. Domestic institutional investors bought shares worth ₹3,801.68 crore.
The Sensex fell 114.19 points, or 0.15 percent, to close at 75,200.85. The Nifty 50 lost 31.95 points, or 0.14 percent, to settle at 23,618. Bank Nifty declined 127.85 points, or 0.24 percent, to close at 53,409.15.
The Midcap 100 index rose 548.20 points, or 0.91 percent, to 61,022, while the Smallcap 100 index gained 206.80 points, or 1.17 percent, to end at 17,863.55.
Market breadth remained positive. On the BSE, 2,544 shares advanced while 1,645 declined. On the NSE, 2,144 stocks gained and 1,101 fell.
BPCL reported a 57.7 percent sequential decline in fourth-quarter profit due to exceptional expenses. However, profit rose 28 percent compared with the same quarter last year. Annual net profit increased 75 percent.
Orkla India posted a 5 percent rise in quarterly revenue, while net profit doubled to ₹73 crore.
Borosil reported a 5.2 percent rise in revenue, but operating profit fell 18.7 percent and net profit declined 5 percent. Profit margin narrowed from 13.8 percent to 10.6 percent.
PTC India saw quarterly revenue rise 33.3 percent, but net profit dropped 69.3 percent.
Hindalco Industries subsidiary Novelis slipped into loss during the fourth quarter after a fire accident at its Oswego plant. Net loss stood at $84 million.
Karnataka Bank reported an 8 percent increase in net interest income and a 61.7 percent jump in net profit for the fourth quarter.
Gold, which had rallied after comments by Donald Trump suggesting a delay in military action, reversed sharply lower within a day.
After touching $4,589.80 an ounce, gold fell $84.20 to close at $4,483.10 on Tuesday. It slipped further to around $4,465 this morning.
In Kerala, 22-carat gold prices rose ₹600 on Tuesday to ₹1,15,060 per sovereign.
Silver, which had climbed to $79.02 an ounce on Tuesday, dropped 5 percent to close at $74.91 and slipped further to $73.76 this morning. Platinum traded at $1,905, palladium at $1,339 and rhodium at $9,325.
Industrial metals traded mixed on Tuesday. Copper fell 0.13 percent to $13,410 per tonne, while aluminium rose 0.93 percent to $3,599.98. Nickel and tin advanced, whereas lead and zinc declined.
Rubber prices continued to decline in international markets. In Bangkok, RSS-3 rubber fell to $288.30 per quintal on Tuesday, while RSS-1 stood at $291.80. In Kerala, RSS-4 rubber was quoted at ₹26,000.
After falling for five consecutive sessions, cocoa prices rebounded in international markets on Tuesday. Cocoa rose 3.06 percent to $3,907 per tonne.
Recent weakness in cocoa prices was triggered by revised production estimates from Ivory Coast, which raised its 2025-26 output forecast from 1.9 million tonnes to 2.2 million tonnes.
The US dollar index rose to 99.33 on Tuesday and climbed further to 99.40 this morning.
The euro weakened to $1.1595, while the pound slipped to $1.338. The Japanese yen weakened to 159.03 against the dollar, while the Chinese yuan declined to 6.81 per dollar.
US 10-year Treasury yields rose further to 4.679 percent this morning.
The dollar climbed to ₹96.70 on Tuesday before closing at ₹96.53. Currency markets expect crude oil prices to remain elevated, keeping pressure on the rupee.
The rupee has weakened 7.5 percent so far in 2026. With the dollar index strengthening further today, the rupee could weaken beyond the ₹97 level.
In the offshore non-deliverable forward (NDF) market, the dollar rose to ₹96.87 this morning. The Chinese yuan weakened to ₹14.16, while the euro slipped to ₹111.93.
Persistent geopolitical tensions and supply disruptions kept crude oil prices elevated.
Brent crude climbed back above $111 a barrel. After closing at $110.92 on Tuesday, Brent rose to $111.35 this morning. WTI crude traded at $104.33, while UAE Murban crude stood at $107.35.
Cryptocurrency markets continued to trade lower. Bitcoin remained below $76,700 this morning, while Ether traded below $2,110 and Solana below $84.
Sensex: 75,200.85 (-0.15%)
Nifty 50: 23,618.00 (-0.14%)
Bank Nifty: 53,409.15 (-0.24%)
Midcap 100: 61,022.00 (+0.91%)
Smallcap 100: 17,863.55 (+1.17%)
Dow Jones: 49,363.88 (-0.65%)
S&P 500: 7,353.61 (-0.67%)
Nasdaq: 25,870.71 (-0.84%)
Dollar: ₹96.53 (+₹0.18)
Gold (ounce): $4,483.10 (-$84.20)
Gold (sovereign): ₹1,15,160 (+₹600)
Brent crude: $110.92 (-$1.18)