Indian equity benchmarks continued their weak trade in morning session amid rising geopolitical tensions following US President Donald Trump's warning of intensified military actions against Iran, driving crude oil prices higher. Unabated foreign fund outflows added to the weakness in domestic equities. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,331.15 crore on Wednesday, according to exchange data. Traders remained cautious as the HSBC India Manufacturing PMI fell to 53.9 in March 2026 from 56.9 in February, slightly higher than preliminary estimates of 53.8. This marked the weakest improvement in business conditions in nearly four years, as factory output and new orders rose at the slowest pace since mid-2022, weighed down by cost pressures, intense competition, and heightened market uncertainty amid the Middle East conflict. On the global front, Asian markets were trading lower, as the U.S. President Donald Trump's highly anticipated address to the nation on the war in the Middle East damped hopes for a swift resolution to the conflict.

The BSE Sensex is currently trading at 71659.65, down by 1474.67 points or 2.02% after trading in a range of 71545.81 and 72262.05. There were 2 stocks advancing against 28 stocks declining on the index.

The top losing sectoral indices on the BSE were Healthcare down by 3.38%, Realty down by 3.27%, Industrials down by 3.14%, Utilities down by 3.00% and Basic Materials down by 2.99%, while there was no gainer on the BSE sectoral front. 

The few gainers on the Sensex were TCS up by 0.31% and HCL Technologies up by 0.08%. On the flip side, Eternal down by 4.60%, Interglobe Aviation down by 4.28%, Sun Pharma down by 4.14%, SBI down by 3.46% and Larsen & Toubro down by 3.43% were the top losers.

Meanwhile, domestic rating agency Crisil in its latest report has said that banks' credit growth is likely to moderate marginally in the current financial year (FY27) and delinquencies would rise amid uncertainties stemming from the ongoing West Asia conflict.  

The agency said the banking system will register credit growth of around 13 per cent in FY27, a marginal decline from the 14 per cent projected for FY26. It said the gross non-performing assets (NPAs) in the banking system have bottomed out, and may rise by up to 0.20 per cent to 2.5 per cent by March 2027. 

Crisil’s chief rating officer Krishnan Sitaraman has highlighted that loans to micro, small and medium enterprises (MSMEs) with exposure to West Asia, either through export markets or raw material sourcing, are the key monitorable, along with micro-loans against property and some unsecured advances. He acknowledged that entities in sectors, such as ceramics and diamond polishing, have already faced adverse impact because of the war in West Asia.

The CNX Nifty is currently trading at 22191.30, down by 488.10 points or 2.15% after trading in a range of 22182.55 and 22394.65. There was 1 stock advancing against 48 stocks declining on the index.

The lone gainer on Nifty was TCS up by 0.17%. On the flip side, Eternal down by 4.49%, Interglobe Aviation down by 4.49%, Sun Pharma Inds. down by 4.19%, Shriram Finance down by 3.71% and Larsen & Toubro down by 3.56% were the top losers.

All Asian markets were trading lower; Nikkei 225 slipped 1227.68 points or 2.28% to 52,512.00, Taiwan Weighted lost 535.25 points or 1.61% to 32,639.57, Jakarta Composite plunged 94.7 points or 1.32% to 7,089.74, Shanghai Composite weakened 27.75 points or 0.7% to 3,920.80, KOSPI dropped 217.92 points or 3.98% to 5,260.78, Hang Seng declined 262.03 points or 1.05% to 25,032.00 and Straits Times fell 38.95 points or 0.78% to 4,936.88.