The tensions in West Asia overshadowed ongoing peace efforts, triggering another wave of selling across global markets. Although Brent crude retreated slightly after briefly touching $98 a barrel, investors remain concerned that any prolonged conflict could keep energy prices elevated and fuel inflationary pressures worldwide.
US futures remained weak after Wall Street suffered a sharp sell-off, while Asian markets opened deep in the red. Back home, investors are also tracking the likely arrival of the southwest monsoon in Kerala and the Reserve Bank of India's policy announcement due on Friday.
Adding to market concerns, a major accounting fraud investigation involving jewellery exporter Rajesh Exports is expected to weigh heavily on investor sentiment.
Gift Nifty closed at 23,332.50 on Wednesday night but fell to 23,161 in early Thursday trade, indicating another sharply negative start for Indian equities.
The India Meteorological Department has indicated that the southwest monsoon could make its onset over Kerala today.
Markets increasingly believe that even if a ceasefire emerges in the Iran conflict, crude prices may not retreat quickly. Investors fear that higher energy costs could prolong inflationary pressures.
The S&P 500 snapped a nine-session winning streak on Wednesday.
Dow Jones fell 620.72 points (1.21 percent) to 50,687.07
S&P 500 lost 56.10 points (0.74 percent) to 7,553.68
Nasdaq Composite dropped 239.93 points (0.89 percent) to 26,853.98
US futures pointed to continued weakness on Thursday morning.
Dow futures rose marginally by 10 points
S&P 500 futures fell 29 points
Nasdaq futures declined 148 points
Indian stocks traded as American Depository Receipts (ADRs) showed resilience after regular market hours.
HDFC Bank rose 1.83 percent in post-market trade to $23.98
ICICI Bank gained 0.12 percent to $25.62
Infosys recovered 0.16 percent after a steep decline during regular trading
Wipro added 0.47 percent in after-hours trade
European markets fell amid rising oil prices and concerns over fresh US tariff measures.
A major development in Europe was the collapse of a renewed takeover attempt for Akzo Nobel by Japan's Nippon Paint and US-based Sherwin-Williams. Akzo Nobel shares plunged 17.2 percent.
Asian equities followed Wall Street lower.
Japan's Nikkei fell 1.8 percent
Australia's benchmark index declined 1.2 percent
South Korea lost 1.25 percent
Hong Kong dropped 1 percent
Shanghai slipped 0.5 percent
Indian equities recovered strongly from intraday lows on Wednesday but still ended significantly lower.
The Sensex recovered nearly 1,000 points from the day's bottom, while the Nifty clawed back almost 300 points before the close.
Banking stocks led the recovery on expectations that the government may provide long-term capital gains tax relief on bond investments by foreign investors. Bank Nifty rebounded more than 1,250 points from its intraday low.
Concerns that advances in artificial intelligence could disrupt traditional IT services severely impacted technology stocks.
The Nifty IT index plunged 5.57 percent.
Major losers included:
TCS: -8.25 percent
Persistent Systems: -7.14 percent
LTIMindtree: -6.63 percent
Coforge: -6.59 percent
Tech Mahindra: -6.45 percent
Financials, pharmaceuticals and healthcare stocks gained, while real estate, consumer durables, FMCG and media stocks declined.
Sensex: 74,346.17 (-0.41 percent)
Nifty 50: 23,405.60 (-0.33 percent)
Bank Nifty: 54,185.95 (+0.88 percent)
Nifty Midcap 100: 60,687.20 (-0.42 percent)
Nifty Smallcap 100: 18,032.05 (-0.11 percent)
Market breadth remained negative.
BSE gainers: 1,758
BSE losers: 2,452
NSE gainers: 1,373
NSE losers: 1,901
Foreign portfolio investors continued heavy selling, offloading equities worth ₹5,616.56 crore. Domestic institutions absorbed the selling with net purchases of ₹5,740.89 crore.
The Securities and Exchange Board of India (SEBI) has alleged that jewellery exporter Rajesh Exports reported fictitious revenue over several years.
According to the regulator's findings, a substantial portion of the company's reported revenue originated from overseas subsidiaries. However, one subsidiary's audited accounts did not reflect such transactions, while another denied carrying out the reported business.
SEBI's investigation concluded that the company may have reported fictitious revenue worth ₹15.15 lakh-crore between 2020 and 2025.
The regulator has barred chairman Rajesh Mehta from dealing in company shares and referred the matter to the National Financial Reporting Authority (NFRA) for further action. A new forensic auditor has also been appointed.
The investigation was initiated following a shareholder complaint filed in March 2024.
Rajesh Exports shares rose 2.99 percent on Wednesday to ₹109.99, but the stock has fallen 36 percent so far in 2026 and has lost more than 80 percent of its value over the past five years.
The company reported revenue of ₹7.79 lakh-crore last year but disclosed only ₹112 crore in net profit in its unaudited accounts.
Rajesh Exports operates a major unit in the Special Economic Zone at Kakkanad, Kochi, and is among the region's largest exporters.
The allegations against Rajesh Exports are being compared with the infamous Satyam Computer Services accounting fraud that came to light in 2009.
Satyam, then considered India's fourth-largest IT services company, admitted to inflating revenues and profits. The company was later acquired by Tech Mahindra, protecting thousands of jobs, while investors suffered massive losses as the stock collapsed by nearly 99 percent.
Gold prices continue to swing in response to developments in the Iran conflict.
After falling to $4,423 an ounce on Wednesday, gold closed at $4,435.70, down $53.40. It rebounded to around $4,465 in early Thursday trade.
In Kerala, 22-carat gold remained unchanged at ₹1,14,560 per sovereign.
Silver fell to $73.72 an ounce.
Other precious metals:
Platinum: $1,873
Palladium: $1,295
Rhodium: $7,525
Most industrial metals declined.
Copper fell 0.33 percent to $13,920.15 per tonne
Aluminium dropped 0.60 percent to $3,727.83
Zinc and lead posted gains, while nickel and tin weakened.
Rubber prices advanced in both domestic and international markets.
Concerns that El Niño conditions could reduce supply have supported prices. In Kerala, RSS-4 rubber climbed to ₹26,200 per quintal.
Cocoa prices fell 0.88 percent to $4,037 per tonne on Wednesday, though concerns persist that El Niño could adversely affect production.
The US Dollar Index rose to 99.53 on Wednesday before easing slightly to 99.45 on Thursday morning.
Euro: $1.161
Pound: $1.3425
Japanese yen: 159.87 per dollar
Chinese yuan: 6.77 per dollar
The yield on the US 10-year Treasury note rose to 4.479 percent.
The rupee lost another 44 paise on Wednesday, ending at ₹95.71 against the dollar.
Reports suggesting that the RBI sold gold reserves last month were denied by both the central bank and the government. Markets are expecting measures to boost dollar inflows in Friday's monetary policy announcement.
In the offshore non-deliverable forward market:
Dollar: ₹95.81
Euro: ₹110.11
Chinese yuan: ₹14.14
Brent crude briefly surged to $98 a barrel amid escalating tensions in West Asia before easing around 1 percent to $96.70 on Thursday morning.
WTI crude traded at $95.03 a barrel.
Cryptocurrency markets remained under pressure after reports that crypto treasury company Strategy sold additional Bitcoin holdings.
Bitcoin fell below $62,500 after dropping 7 percent
Ether declined another 7 percent to around $1,770
Solana fell more than 8 percent and slipped below $69
Sensex: 74,346.17 (-0.41%)
Nifty 50: 23,405.60 (-0.33%)
Bank Nifty: 54,185.95 (+0.88%)
Midcap 100: 60,687.20 (-0.42%)
Smallcap 100: 18,032.05 (-0.11%)
Dow Jones: 50,687.07 (-1.21%)
S&P 500: 7,553.68 (-0.74%)
Nasdaq: 26,853.98 (-0.89%)
Dollar/₹: ₹95.71 (+₹0.44)
Gold (ounce): $4,435.70 (-$53.40)
Gold (sovereign): ₹1,14,560
Brent crude: $97.81 (+$1.81)