US-Iran Conflict Drives Indian Stock Market Decline

Indian equity markets experienced a downturn on July 7 and 8, 2026, as escalating geopolitical tensions between the United States and Iran drove global volatility. The BSE Sensex and NSE Nifty 50 initially reached 11-week highs on Tuesday morning due to a rally in IT stocks, including gains for Tata Consultancy Services and Infosys. However, the indices ended Tuesday lower, snapping a four-day winning streak after Iran fired missiles at commercial ships in the Strait of Hormuz.

Donald Trump responded to the attacks by stating that Washington would either reach a deal with Tehran or "finish the job." Following this, the United States Central Command launched air strikes against Iran and the U.S. government revoked a waiver allowing Iran to sell oil globally. These actions pushed Brent crude prices from approximately $73 to over $76 per barrel.

On Wednesday, the Sensex fell 364.27 points to 77,815.77 and the Nifty 50 slipped to 24,279.05. The decline was exacerbated by a global sell-off in AI-linked technology stocks and a strengthening U.S. dollar, prompting foreign institutional investors to accelerate capital outflows. While pharma and IT sectors provided partial support, the Nifty Oil & Gas index led the losses. Market volatility was further influenced by Saudi Arabia cutting August crude prices for Asian buyers and a disappointing Q1FY27 update from Trent, which saw its shares tumble 12 percent.