Indian equity benchmarks continued their downward trajectory and ended sharply lower on Wednesday in tandem with a weak trend in Asian markets as the conflict in West Asia intensified, driving oil prices higher. Withdrawal of foreign funds also weighed on sentiment. On Monday, foreign institutional investors offloaded equities worth Rs 3,295.64 crore, according to exchange data. 

Some of the important factors in trade: 

India’s services sector witness softer growth in February: India’s services sector growth eased in the month of February, as new orders rose at the slowest pace since January 2025. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index slowed down to 58.1 in February from 58.5 in January. 

India’s current account deficit edges up to $13.2 billion in Q3FY26: The data released by the Reserve Bank of India (RBI) has showed that India’s current account deficit (CAD) edged up to $13.2 billion or 1.3% of Gross Domestic Product (GDP), in Q3FY26 from $11.3 billion or 1.1% of GDP in the year-ago period.  

India, Canada kickstart negotiations for CEPA to boost trade ties: With an aim to fast-track free trade agreement (FTA), India and Canada have launched formal negotiations for a Comprehensive Economic Partnership Agreement (CEPA). 

Rupee hits record low against US Dollar: Indian rupee slumped to close at an all-time low against US dollar, weighed down by spiking crude oil prices in the wake of the Iran crisis. 

Global front: Asian markets settled lower as soaring oil and gas prices due to escalating Middle East conflict spooked markets and fueled demand for safe-haven assets. European markets were trading higher as the HCOB Eurozone services PMI business activity index rose from 51.6 in January to 51.9, hitting two-month high and matching expectations. 

Finally, the BSE Sensex fell 1122.66 points or 1.40% to 79,116.19 and the CNX Nifty was down by 385.20 points or 1.55% to 24,480.50.       

The BSE Sensex touched high and low of 79,527.41 and 78,443.20 respectively. There were 3 stocks advancing against 27 stocks declining on the index.

The lone gaining sectoral index on the BSE was TECK up by 0.48%, while Metal down by 4.00%, Oil & Gas down by 3.56%, Industrials down by 3.29%, Realty down by 3.16% and Basic Materials down by 3.12% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.78%, Infosys up by 1.50% and Tech Mahindra up by 0.51%. On the flip side, Tata Steel down by 6.76%, Larsen & Toubro down by 4.53%, Bajaj Finance down by 3.36%, Ultratech Cement down by 3.32% and NTPC down by 3.07% were the top losers.

Meanwhile, the data released by the Reserve Bank of India (RBI) has showed that India’s current account deficit (CAD) edged up to $13.2 billion or 1.3% of Gross Domestic Product (GDP), in the December quarter of FY26 (Q3FY26) from $11.3 billion or 1.1% of GDP in the year-ago period. The CAD widened mainly due to higher trade deficit.

On the merchandise front, the country’s trade deficit has grown 18% to $93.6 billion during Q3FY26 from $79.3 billion in the same quarter last year. Meanwhile, net services receipts have increased by 12.3% to $57.5 billion in Q3FY26 as compared to $51.2 billion in same quarter last year. The services exports have risen on a year-on-year basis in major categories such as computer services and other business services. Further, net outgo on the primary income account, mainly reflecting payments of investment income, has declined 25.61% to $12.2 billion during Q3FY26 as compared to $16.4 billion in year ago period.

However, the CAD has moderated to $30.1 billion or 1% of GDP during in April-December 2025, from $36.6 billion or 1.3% of GDP in the same period a year ago. During the April-December 2025 period, the country’s net foreign direct investment (FDI) inflows rose four-fold to $3.0 billion from $ 0.6 billion in during the same period last year. However, the FPI recorded net outflows of $4.3 billion in April-December 2025 period as against net inflows of $9.4 billion a year ago. Further, the foreign exchange reserves depleted by $30.8 billion (on a BoP basis) during the April-December 2025 period as compared with a depletion of $13.8 billion in the same period last year.

CNX Nifty touched high and low of 24,602.45 and 24,305.40 respectively. There were 4 stocks advancing against 46 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 1.88%, Coal India up by 1.85%, Infosys up by 1.33% and Tech Mahindra up by 0.15%. On the flip side, Tata Steel down by 7.08%, Tata Motors Passenger down by 5.29%, SBI Life Insurance down by 4.98%, JSW Steel down by 4.67% and Larsen & Toubro down by 4.54% and were the top losers. 

European markets were trading higher; UK’s FTSE 100 increased 49.74 points or 0.47% to 10,533.87, France’s CAC rose 74.36 points or 0.92% to 8,178.20 and Germany’s DAX gained 356.85 points or 1.5% to 24,147.50. 

Asian markets settled lower on Wednesday tracking Wall Streets’ fall overnight as investors monitored developments in the Middle East. Market sentiments weakened on concerns that rising energy prices, fuelled by the US and Israel’s escalating conflict with Iran, could slow economic growth and stoke inflation. Chinese and Hong Kong shares tumbled amid mixed Chinese PMI data. Official data showed Chinese manufacturing and services sectors contracted for a second consecutive month in February, while a private survey indicated that both manufacturing and services activity accelerated last month. Further, investors were keeping close eye on the annual National People’s Congress with expectations for a 4.5% to 5% growth target for 2026 and details on the 15th Five-Year Plan (2026–2030). Japanese shares fell as the Iran conflict escalates. Bank of Japan Governor Kazuo Ueda warned that the Middle East conflict could significantly affect Japan’s economy, signalling the central bank is likely to keep rates steady for an extended period. Kospi plunged more than 12%, recording its largest-ever daily loss, with Samsung Electronics and SK Hynix taking the hardest hit. The market participants overlooked the report saying Trump vowed that the US Navy would begin escorting oil tankers and other commercial vessels through the Strait of Hormuz if necessary to ensure the ‘free flow of energy to the world’.