Indian equity benchmarks remained under heavy selling pressure on Wednesday, with both the Nifty and Sensex settling sharply lower amid escalating tensions in the Middle East after U.S. and Israeli forces attacked targets in Tehran, Iran.
Markets made a gap-down opening amid FII outflows and broad-based selling across sectors. In the afternoon session, gains in IT stocks helped the indices pare some losses, but finally closed the session deep in the red.
Continued foreign fund outflows kept market sentiment subdued, with foreign institutional investors (FIIs) offloading net sellers of shares worth Rs 3,295.64 crore on Monday. Traders took note that the HSBC India Services Purchasing Managers’ Index (PMI), compiled by S&P Global, fell to 58.1 in February from 58.4 in January. Traders were also concerned as the government data showed that the 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.
European equity markets traded in the green after the HCOB Eurozone services PMI business activity index rose from 51.6 in January to 51.9, hitting a two-month high and matching expectations. Asian markets ended lower due to the escalating Middle East conflict.
The SENSEX ended at 79116.19, down by 1122.66 points or 1.40% after trading in a range of 78443.20 and 79527.41. 3 stocks were advancing against 27 stocks declining on the index.
The only gaining sectoral indices on the BSE were TECK up by 0.48%, while Metal down by 4.00%, Oil & Gas down by 3.56%, Industrials down by 3.29%, Realty down by 3.16%, and Basic Materials down by 3.12% were the top losing indices on the BSE.
Meanwhile, India and Canada have launched formal negotiations for a Comprehensive Economic Partnership Agreement (CEPA) with an aim to fast-track a free trade agreement (FTA). 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 NIFY50 ended at 24480.50, down by 385.20 points or 1.55% after trading in a range of 24305.40 and 24602.45. 4 stocks were advancing against 46 stocks declining on the index.
The few gainers on Nifty were Coal India up by 2.09%, Bharti Airtel up by 1.75%, Infosys up by 1.44% and Tech Mahindra up by 0.43%. On the flip side, Tata Steel down by 6.77%, Tata Motors Passenger down by 5.23%, SBI Life Insurance down by 5.00%, Larsen & Toubro down by 4.53% and JSW Steel down by 4.28% were the top losers.
European markets were trading higher; Germany’s DAX gained 307.85 points or 1.28% to 24,098.50, France’s CAC rose 72.46 points or 0.89% to 8,176.30 and UK’s FTSE 100 increased 44.66 points or 0.42% to 10,528.79.