INDIA STOCKS-Indian shares fall on global risk-off as Iran war drags on
By Bharath Rajeswaran
March 27 (Reuters) - Indian shares fell on Friday, tracking global equities, as conflicting signals from the U.S-Israeli war on Iran diluted hopes of a resolution to the conflict and weighed on sentiment.
The Nifty 50 .NSEI fell 1.24% to 23,018.25 and the BSE Sensex .BSESN slipped 1.26% to 74,330.84, as of 10:06 a.m. IST. Asian shares .MIAPJ0000PUS fell 0.7% and oil hovered around $107 per barrel.
Fifteen of the 16 major sectors logged losses, and the broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 slid 1.5% each.
U.S. President Donald Trump said he would extend a pause on attacks against Iran's energy plants into April and that talks with Iran were going "very well". However, an Iranian official said the U.S. proposal for ending the war was "one-sided and unfair", with Iran continuing to strike U.S. and Israeli bases in the region.
"Indian equity markets are likely to face sharper downward earnings revisions than previously anticipated as crude oil at $100 per barrel could lift raw material costs for non-financials by 20%, outpacing sales," said Dhananjay Sinha, chief executive and co-head of institutional equities at Systematix Group.
If crude prices sustain around $100 per barrel versus the 12-month average of $65, India's oil import bill could rise to $291 billion, an incremental $105 billion over fiscal 2026 estimates, according to analysts.
The uncertainty has lifted the volatility index .NIFVIX to 26.7, near its highest level since June 2024, with the Nifty and Sensex swinging between losses of 2.6% and gains of 2% through a holiday-truncated week.
The two have lost about 8.6% each since the U.S.-Israeli war on Iran began on February 28.
"While markets swing between hope and fear with every war-related headline, the bigger picture is a fundamental shift in the geopolitical landscape, one that will likely see frequent eruptions. The market is still under-appreciating this new reality."
HDFC Bank HDBK.NS fell 2.2% as the markets regulator began a preliminary review of part-time chairman Atanu Chakraborty's abrupt resignation.
Other heavyweights Reliance Industries RELI.NS and Larsen & Toubro LART.NS were down 2.5% each.
($1 = 94.1980 Indian rupees)
