Global markets traded cautiously on Thursday after the US announced a temporary halt to its missile and bombing campaign against Iran. President Donald Trump warned that military action could resume if Tehran refuses to accept a proposed agreement. While Iran's Islamic Revolutionary Guard Corps vowed retaliation, no fresh attacks were reported after the second day of hostilities. Diplomatic efforts also gathered pace, with a Qatari delegation arriving in Tehran for emergency mediation talks.
The uncertainty surrounding the conflict continues to dominate investor sentiment. US futures edged higher, while Asian markets swung sharply between gains and losses. Gift Nifty, which closed at 23,140 on Wednesday night, fluctuated between 23,224 and 23,110 in early trade, signalling a weak opening for Indian equities.
Wall Street witnessed a sharp sell-off on Wednesday as concerns over the Iran conflict coincided with a surge in inflation.
US consumer inflation accelerated to 4.2 percent in May, the highest level in three years. Core inflation, excluding food and energy prices, stood at 2.9 percent. Despite the inflation spike, markets expect the US Federal Reserve to keep interest rates unchanged at next week's policy meeting.
The Dow Jones Industrial Average fell 953.33 points (1.87 percent) to close at 49,918.78. The S&P 500 lost 119.66 points (1.62 percent) to end at 7,266.99, while the Nasdaq Composite dropped 509.32 points (1.98 percent) to 25,169.50.
Shares of Oracle Corporation plunged 10 percent despite reporting better-than-expected earnings. Investors reacted negatively after the company announced plans to raise an additional $40 billion through debt and equity offerings.
Despite continuing tensions in West Asia, US index futures moved higher on expectations that the Federal Reserve will avoid further rate hikes.
Dow futures gained 40 points, S&P 500 futures rose 17 points, while Nasdaq futures advanced 140 points in early trade.
Indian ADRs in New York delivered a mixed performance.
HDFC Bank rose in after-hours trading after slipping during regular trading.
ICICI Bank pared gains in post-market trade.
Infosys recovered modestly after regular-session losses.
Wipro extended declines in after-hours trading.
Most European markets ended lower on Wednesday, although British indices managed modest gains.
Asian markets opened sharply lower before recovering part of their losses. Japan's Nikkei fell more than 2.5 percent initially before turning positive and later slipping again. South Korea's Kospi, Australian shares and Hong Kong stocks also witnessed heavy volatility, while Shanghai traded with modest gains.
Indian equities attempted to defy weak global cues on Wednesday but failed to sustain momentum. Broader markets suffered heavy losses, with mid cap and small cap stocks bearing the brunt of the selling.
Investor sentiment was hurt by data showing that inflows into equity mutual funds fell 40 percent in May. Retail investors have been a key support for the market through SIP investments, and the slowdown raised concerns about the sustainability of domestic flows.
From the day's high, the Sensex shed around 630 points and the Nifty lost nearly 210 points before the close.
Media, metal, realty, oil and gas, consumer durables, defence, capital market, IT and auto stocks came under pressure, while FMCG and select financial stocks outperformed.
On Wednesday:
Sensex gained 64.42 points (0.09 percent) to 73,983.18
Nifty 50 fell 27.15 points (0.12 percent) to 23,214.95
Bank Nifty declined 94.20 points (0.17 percent) to 55,100.30
Nifty Midcap 100 dropped 1.49 percent
Nifty Smallcap 100 lost 1.33 percent
Market breadth remained weak. On the BSE, 2,818 stocks declined against 1,399 gainers.
Shares of Rajesh Exports hit the lower circuit for a fifth straight session amid continuing concerns over alleged discrepancies linked to its battery venture.
Among Kerala-based banking stocks:
Federal Bank touched a record high of ₹316.70 before closing 1.17 percent lower at ₹311.40.
South Indian Bank fell 0.96 percent to ₹45.30.
CSB Bank gained 1.97 percent to ₹360.
Dhanlaxmi Bank declined 3.87 percent to ₹31.80.
Foreign portfolio investors remained sellers, offloading a net ₹2,124.98 crore worth of shares on Wednesday.
Domestic institutions and mutual funds absorbed the selling pressure, recording net purchases of ₹3,123.95 crore.
Gold prices suffered a dramatic fall, wiping out all gains recorded in 2026.
The metal fell as low as $4,022.90 per ounce in early trade before recovering towards $4,100. Gold had plunged 4.42 percent, or $188.30, on Wednesday to close at $4,072.30 an ounce.
In Kerala, 22-carat gold prices dropped ₹3,960 per sovereign on Wednesday to ₹1,08,360, one of the steepest single-day declines in recent years. Prices are expected to weaken further.
Silver slipped to $63.68 per ounce.
Other precious metals:
Platinum: $1,667
Palladium: $1,217
Rhodium: $7,625
Renewed geopolitical tensions weighed on industrial metals.
Copper fell 2.53 percent to $13,369.35 per tonne. Aluminium declined 1.30 percent to $3,496.46, while zinc, tin and nickel dropped more than 2.5 percent each.
Conflicting influences from the West Asia conflict and El Niño conditions kept rubber prices mixed.
In Bangkok, RSS-3 rubber rose marginally to $307.20 per quintal, while RSS-1 reached $310.70. In Kerala, RSS-4 continued at a record ₹26,800 per quintal. Synthetic rubber prices eased 0.42 percent.
International urea prices fell 1.12 percent and are down 27.40 percent over the past month.
The US dollar index remained below the psychologically important 100 mark, closing at 99.95 and easing further to 99.91 in early trade.
The euro strengthened to $1.1554 and the pound rose to $1.3387. The Japanese yen weakened to 160.53 per dollar, while the Chinese yuan held steady near 6.77 per dollar.
The yield on the 10-year US Treasury note rose to 4.548 percent.
The rupee remained under pressure but managed to close eight paise stronger at ₹95.27 against the dollar, aided by foreign currency mobilisation efforts by Indian banks.
In the offshore NDF market, the dollar strengthened to ₹95.40. The euro traded around ₹110.06, while the Chinese yuan stood at ₹14.07.
Fresh attacks in Iran pushed oil prices higher.
Brent crude settled at $93.10 per barrel on Wednesday and climbed 1.4 percent to $94.39 in early trade on Thursday. WTI crude moved up to $91.53 per barrel.
Cryptocurrency markets continued to fluctuate sharply.
Bitcoin traded above $62,100.
Ethereum remained below $1,640.
Solana stayed under $64.
Sensex: 73,983.18 (+0.09%)
Nifty 50: 23,214.95 (-0.12%)
Bank Nifty: 55,160.30 (-0.17%)
Midcap 100: 59,810.20 (-1.49%)
Smallcap 100: 17,822.50 (-1.33%)
Dow Jones: 49,918.78 (-1.87%)
S&P 500: 7,266.99 (-1.62%)
Nasdaq: 25,169.50 (-1.98%)
Dollar: ₹95.27 (-₹0.08)
Gold (ounce): $4,070.70 (-$188.30)
Gold (sovereign): ₹1,08,360 (-₹3,960)
Brent crude: $93.10 (+$1.65)