Indian equity benchmarks closed sharply lower on Friday, with the Nifty and Sensex tumbling more than 1.2%, dragged by intense selling in banking stocks. Markets made a negative start and extended their losses throughout the session, amid escalating geopolitical tensions in the Middle East and continued foreign institutional investor (FII) outflows. 

Some of the important factors in trade:

Persistent FIIs outflows: Sentiments remained subdued amid continued outflows by foreign institutional investors (FIIs), as FIIs net sold equities worth nearly Rs 3,752.52 crore on Thursday.

Strait of Hormuz disruptions beyond week could affect multiple Indian sectors: Traders remained cautious as Global Trade Research Initiative (GTRI) stated that prolonged disruptions to shipping through the Strait of Hormuz beyond a week could rapidly spill over from energy markets to India’s fertiliser supplies, industrial inputs, construction materials and export sectors such as diamonds. 

Pharma stocks remained in focus: Pharmaceuticals Export Promotion Council of India said the domestic pharma industry is staring at a loss ranging between Rs 2,500 crore and Rs 5,000 crore due to the various supply and freight movement disruptions owing to the conflict in the Middle East. 

On the global front: European equity markets traded mostly in red ahead of release of the euro area’s revised GDP data. Asian markets ended mostly in green after Chinese government announced a GDP growth target of 4.5-5 percent for 2026 in anticipation of greater global uncertainty.

The BSE Sensex ended at 78918.90, down by 1097.00 points or 1.37% after trading in a range of 78812.18 and 79753.03. There were 7 stocks advancing against 23 stocks declining on the index. (Provisional)

The few gaining sectoral indices on the BSE were Capital Goods up by 1.30%, Power up by 0.44% and Industrials up by 0.06%, while Bankex down by 2.14%, Realty down by 2.03%, Auto down by 1.10%, Consumer Discretionary down by 1.04% and Telecom down by 0.67% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were Bharat Electronics up by 2.17%, Reliance Industries up by 1.32%, NTPC up by 0.83%, Sun Pharma up by 0.68% and Infosys up by 0.47%. On the flip side, ICICI Bank down by 3.19%, Eternal down by 2.91%, SBI down by 2.68%, Axis Bank down by 2.44% and HDFC Bank down by 2.39% were the top losers. (Provisional)

Meanwhile, at a time when West Asia conflict spiking prices of global oil and natural gas, the rating agency - Fitch Ratings has said that the $63 per barrel (bbl) estimation for average Brent crude price for 2026 is unlikely to see any significant upside as the Strait of Hormuz closure would be only temporary and global oil market oversupply should limit oil price rises. It noted that the strait is not formally closed but vessels are increasingly avoiding it given the risk of attack by Iran or its proxies. Oil majors have halted shipments for safety reasons, and insurers are cancelling war risk cover for vessels.

The Strait of Hormuz is a narrow 33-kilometre passage connecting the Persian Gulf to the Arabian Sea, and prior to the conflict, around 20 million barrels per day (MMbpd) of crude oil and petroleum products transited the strait, accounting for about a quarter of global seaborne oil trade and a fifth of global oil consumption. Fitch highlighted that oil exports from Saudi Arabia and the UAE accounts for around half of the oil volumes transported through the strait, with the remainder from Iraq, Kuwait and Iran, and around half of these exports go to China and India.

It expects the global oil market to remain over supplied in 2026. It emphasized that any potential supply disruption would be offset by global market oversupply. It pointed that the global supply growth exceeded demand growth in 2025 with supply increasing by around 3MMbpd against below 1MMbpd demand growth. Besides, Iran accounts only for about 3.5% of global crude oil production, producing about 3.5 MMbpd and exporting about 2 MMbpd. However, it noted that the duration and intensity of the increasingly regional conflict remain uncertain, and oil price volatility would rise if there were to be any material disruption to Iranian oil production.

The CNX Nifty ended at 24450.45, down by 315.45 points or 1.27% after trading in a range of 24415.75 and 24700.90. There were 13 stocks advancing against 37 stocks declining on the index. (Provisional)

The top gainers on Nifty were Bharat Electronics up by 2.09%, Reliance Industries up by 1.34%, ONGC up by 1.28%, Hindalco up by 0.84% and NTPC up by 0.82%. On the flip side, ICICI Bank down by 3.13%, Eternal down by 2.89%, Shriram Finance down by 2.84%, Ultratech Cement down by 2.70% and Axis Bank down by 2.53% were the top losers. (Provisional)

European markets were trading mostly in red; France’s CAC fell 7.7 points or 0.1% to 8,038.10 and Germany’s DAX lost 12.75 points or 0.05% to 23,803.00, while UK’s FTSE 100 increased 10.03 points or 0.1% to 10,423.97.