Indian equity benchmarks, resuming after Tuesday's Holi holiday, made gap-down opening on Wednesday amid rising Middle East tensions and escalating US-Israel-Iran war. Sensex and Nifty witnessed bloodbath in early deals with cut of over 2% each on account of selling in Metal and Oil & Gas counters. Investors were cautious as crude oil prices surged and fears grew that a prolonged war in Middle East could disrupt global energy supplies and fuel inflation. Foreign fund outflows also dented the sentiments. Foreign institutional investors were net sellers of shares worth Rs 3,295.64 crore on Monday. Market participants were also concerned as the government data showed that Index of Industrial Production (IIP) recorded a 4.8% year-on-year growth in January 2026, which is lower than 7.8% (Quick Estimate) growth in the month of December 2025. 

Besides, rupee slumped 69 paise to an all-time low of 92.18 against the US dollar in early trade. Traders avoided to take risk ahead of release of the HSBC Composite PMI Final data to be out later in the day. Meanwhile, Commerce and Industry Minister Piyush Goyal said the government has set up an inter-ministerial group to monitor developments in West Asia on a daily basis and assess potential vulnerabilities in shipping, logistics, exports and critical imports.

On the global front, all Asian markets were trading lower, following the broadly negative cues from global markets overnight, as traders remain concerned over the inflationary impact of the prolonged conflict in the Middle East as it entered the fifth day. US President Donald Trump predicted that the war would last four to five weeks. Meanwhile, the services sector in Japan continued to expand in February, and at a faster pace, the latest survey from S&P Global revealed with a services PMI score of 53.8.

The BSE Sensex is currently trading at 78602.20, down by 1636.65 points or 2.04% after trading in a range of 78443.20 and 78928.92. There were 3 stocks advancing against 27 stocks declining on the index.

The only gaining sectoral indices on the BSE were IT up by 0.42% and TECK up by 0.02%, while Metal down by 3.63%, Industrials down by 3.35%, Oil & Gas down by 3.21%, Basic Materials down by 3.18%, Realty down by 3.18% were the top losing indices on BSE.

The few gainers on the Sensex were Infosys up by 1.54%, Tech Mahindra up by 0.41% and HCL Technologies up by 0.27%. On the flip side, Larsen & Toubro down by 7.16%, Tata Steel down by 5.26%, Interglobe Aviation down by 4.61%, Ultratech Cement down by 3.99% and Titan Company down by 3.60% were the top losers.

Meanwhile, with an aim to fast-track free trade agreement (FTA), India and Canada have launched formal negotiations for a Comprehensive Economic Partnership Agreement (CEPA). The Terms of Reference (ToR) for the agreement was signed by Commerce and Industry Minister Piyush Goyal and his Canadian counterpart Maninder Sidhu in the presence of Prime Minister Narendra Modi and Prime Minister Mark Carney of Canada at Hyderabad House. 

The ToR of negotiations will provide format, frequency, and approach to the CEPA negotiations. It will serve as a guide to facilitate negotiations in order to conclude an ambitious, balanced and mutually beneficial pact. Both the sides are looking to finalise the pact soon. Prime Minister Narendra Modi said the two countries have set a target of achieving $50 billion in bilateral trade by 2030 and underlined the need to unlock the full potential of economic cooperation through an early conclusion of the CEPA. Carney described the move as an expansion of a valued partnership with ‘new ambition, focus and foresight’.

The proposed agreement will cover trade in goods and services, along with other mutually agreed policy areas. Bilateral trade between India and Canada stood at $8.66 billion in FY 2024-25, with India exporting goods worth $4.22 billion and importing $4.44 billion. India’s key exports to Canada include pharmaceuticals, iron and steel, seafood, cotton garments, electronic goods and chemicals. Major imports from Canada include pulses, pearls and semi-precious stones, coal, fertilisers, paper and crude petroleum.

The CNX Nifty is currently trading at 24359.10, down by 506.60 points or 2.04% after trading in a range of 24315.45 and 24476.95. There were 4 stocks advancing against 46 stocks declining on the index.

The few gainers on Nifty were Coal India up by 2.15%, Infosys up by 1.55%, Tech Mahindra up by 0.46% and HCL Technologies up by 0.26%. On the flip side, Larsen & Toubro down by 7.11%, Shriram Finance down by 5.46%, Tata Steel down by 5.32%, Interglobe Aviation down by 4.87% and Ultratech Cement down by 4.16% were the top losers.

All Asian markets were trading lower; Nikkei 225 slipped 1921.05 points or 3.53% to 54,358.00, Taiwan Weighted plunged 1316.37 points or 3.99% to 33,007.28, Hang Seng declined 723.08 points or 2.89% to 25,045.00, KOSPI dropped 447.62 points or 8.38% to 5,344.29, Jakarta Composite lost 264.36 points or 3.44% to 7,675.41, Straits Times fell 115.19 points or 2.4% to 4,801.46 and Shanghai Composite was down by 59.11 points or 1.45% to 4,063.57.