Indian equity benchmarks are staring at a sharply negative start on Wednesday after being shut for Holi, as global markets reel under renewed geopolitical stress in West Asia. The immediate trigger is the intensifying conflict involving Iran, which has entered its fourth day and is now spilling over into global asset prices.

Gift Nifty futures were trading at 24,321 around 4:45 pm, down 671.5 points or 2.7 percent, signalling heavy selling pressure at the open. The decline follows a sharp risk-off move across global equities after coordinated US-Israel strikes on Iran raised fears of a wider regional escalation.

Crude oil has emerged as the central pressure point. Brent crude rose past USD 80 per barrel after surging more than 7 percent earlier in the week, reflecting concerns over supply disruption. Iran has reportedly attacked the US embassy in Riyadh and threatened a complete closure of the Strait of Hormuz a vital shipping corridor for global oil and gas trade. Any disruption to this route would have immediate implications for energy-importing economies such as India.

US President Donald Trump on Monday defended what he described as a broad and open-ended military campaign on Iran, stating that operations were ahead of expectations. The rhetoric has deepened investor anxiety over the possibility of prolonged conflict.

The tremors were visible across global markets. South Korea’s Kospi index plunged 7.2 percent in its worst session since August 2024 as trading resumed after a holiday. Semiconductor majors Samsung Electronics Co. and SK Hynix Inc. fell at least 9.9 percent each, highlighting how geopolitical stress is cascading into high-beta sectors.

Japan’s Nikkei 225 declined more than 3 percent, Hong Kong’s Hang Seng index fell over 1 percent, and China’s SSE Composite also slipped more than 1 percent. In Europe, the Stoxx Europe 600 was down 2.5 percent in afternoon trade. Wall Street futures dropped as much as 2 percent, indicating further global weakness.

Indian markets had already shown signs of vulnerability before the holiday break. On Monday, the Sensex fell as much as 2,743.46 points or 3.37 percent in early trade before recovering partially to close down 1,048.34 points or 1.29 percent at 80,238.85. The Nifty dropped 575.15 points intraday before settling 312.95 points lower at 24,865.70.

What is changing now is the risk premium attached to energy and geopolitics. For India, which imports the bulk of its crude oil requirement, a sustained spike in oil prices feeds directly into the macro equation. Higher crude prices raise input costs for oil marketing companies, airlines, paint manufacturers, and other energy-intensive sectors. They also threaten to widen the current account deficit and complicate inflation management.

If Brent remains above USD 80 or moves higher, the implications for domestic inflation could be material. India’s disinflation trajectory has been supported partly by stable energy prices. A reversal in that trend could constrain policy flexibility and keep bond yields elevated.

From a sectoral lens, energy producers may see near-term sentiment support, but downstream companies could face margin pressure if retail fuel price adjustments lag crude movements. Aviation, chemicals, logistics, and consumer discretionary segments are typically sensitive to sustained fuel cost increases. Banking stocks may also come under scrutiny if inflation expectations shift and interest rate outlooks are recalibrated.