Indian shares slide to near six-month low as US-Iran deadlock lifts oil prices

Indian stocks plunged to near six-month lows on Monday, following an ongoing seven-week decline, as oil prices surged due to a stalemate in US-Iranian peace negotiations. President Donald Trump rejected Iran's suggestion to reopen the Strait of Hormuz and end the conflict, while Iran insisted that diplomacy was the only way to resolve tensions with the United States and Israel.

The impasse heightened worries about oil supplies through the crucial shipping lane, driving Brent crude futures up 3.7% to $108 a barrel. For India, which ranks third globally in crude imports, rising oil costs could fuel inflation, increase the import bill, and strain corporate earnings. The Nifty 50 index fell 1.56% to 22,780.25, and the BSE Sensex slipped 1.52% to 72,771.72.

Over the past week, the indexes declined by nearly 6%, marking one of their longest losing streaks on record.

Sachin Gupta, Vice President of Research at Choice Broking, attributed the market sell-off to the uptick in Brent crude and elevated global bond yields. Higher U.S. Treasury yields may make dollar-denominated fixed-income investments more appealing, increasing borrowing costs worldwide and potentially reducing foreign investment in emerging markets.

All 16 major sectors experienced declines, with small and mid-cap shares shedding 1.9% and 1.6%, respectively. Financials and banking stocks, heavily weighted in the indexes, fell 1.7% and 2%, respectively. Shares of HDFC Bank and Reliance Industries, both large holdings in the benchmarks, declined 2.3% each. ICICI Bank also dropped 1.9%.

Among individual stocks, Yes Bank plummeted 5.9%, with Citi warning of near-term challenges due to weak earnings and rising credit costs. Borosil, however, rose 6% after Investec upgraded its rating to "buy" and increased its price target, citing profits from anti-dumping duties on Chinese borosilicate tableware and kitchen glassware.