Indian equity benchmark indices Sensex and Nifty traded in negative territory on Wednesday as investors reacted to a combination of global and domestic headwinds, including a sharp rise in crude oil prices, fresh US tariff measures on generic medicines, and higher market volatility.

Brent crude futures climbed around 1.2 percent to approximately $92 per barrel, reaching their highest level in more than five weeks amid the escalating conflict in West Asia. Higher crude prices are generally considered negative for India, which imports the majority of its crude oil requirements. A sustained increase in oil prices could fuel inflationary pressures, widen the country's trade deficit, increase import costs, and put pressure on corporate profitability.

Market sentiment was further affected by developments in the pharmaceutical sector after US President Donald Trump announced a phased tariff plan on imported generic medicines. The Nifty Pharma index declined nearly 2 percent, making it the worst-performing sectoral index during the session. Major pharmaceutical companies including Sun Pharmaceutical Industries, Cipla, and Dr. Reddy's Laboratories witnessed notable declines as investors assessed the potential impact of the proposed tariffs on Indian drug manufacturers, many of which derive a significant share of their revenue from the US market.

Adding to the cautious mood, India VIX, the market's volatility index, rose nearly 3 percent to 12.94, reflecting increased uncertainty and heightened risk perception among investors.

The combination of rising geopolitical tensions, elevated crude oil prices, concerns over US trade policy, and higher market volatility kept investors on the sidelines, resulting in broad-based weakness across the benchmark indices.