Indian Equities Muted on US-Iran Truce Uncertainty

Indian Equities Muted on US-Iran Truce Uncertainty

Indian stock benchmarks were little changed in early trade on Wednesday, as caution prevailed over the shaky truce between the U.S. and Iran amid worries of an escalation in the Middle East conflict. The Nifty 50 rose 0.08% to 23,937.90, while the BSE Sensex added 0.11% to 76,094.41. Both indexes have fallen 5.1% and 6.6% respectively since the Iran war began in late February.

Geopolitical Risks and Market Response

Iran said the U.S. had violated a ceasefire by striking targets near the contested Strait of Hormuz, potentially complicating efforts to end the three-month-old war. U.S. Secretary of State Marco Rubio said it could take 'a few days' to negotiate a deal. Brent crude hovered around $98 a barrel.

'Investor sentiment is likely to stay cautious as mixed signals from U.S.-Iran talks and recent U.S. strikes on Iran deepen risk aversion,' said Siddhartha Khemka, head of research of wealth management at Motilal Oswal Financial Services.

Sectoral Performance

India's broader small-caps and mid-caps gained about 0.2% and 0.4% respectively. Eight of the 16 major sectors logged gains. Financials and private banks both dropped 0.4%, dragged by a 2% fall in HDFC Bank after a report of an internal vigilance probe into interest payments.

The metals index gained 1.8%, led by a 4% rise in aluminium makers Hindalco and National Aluminium as aluminium prices surged to a more than four-year high. Coal India fell 4% on a government stake sale announcement, and Oil and Natural Gas Corp lost 3% on modest quarterly revenue and profit growth.