Benchmarks continued to languish well below the neutral lines in the late afternoon session with heavy weights like HDFC Bank, ICICI Bank and Reliance industries leading the losses. Besides, escalating tensions in West Asia have sparked caution among investors after Iran seized two cargo ships seeking to exit the Gulf via the vital global oil route and warned that the U.S. and Israel will not achieve their goals 'through bullying’. The tensions have fired up the global energy prices with Brent crude trading above $104 a barrel. Besides, continuous foreign capital outflows weighed on trading sentiments. The foreign institutional investors were the net sellers on Wednesday’s session, offloading securities worth Rs 2,078.36 crore. 

On the global front, Asian and European equity markets were trading mostly in red as inflation and growth concerns mount amid high energy prices.

The BSE Sensex is currently trading at 77664.89, down by 851.60 points or 1.08% after trading in a range of 77650.00 and 78178.54. There were 6 stocks advancing against 24 stocks declining on the index.

The few gaining sectoral indices on the BSE were Healthcare up by 1.65%, Capital Goods up by 0.39% and Power up by 0.28%, while Auto down by 2.48%, Realty down by 1.88%, Consumer Discretionary down by 1.79%, Consumer Durables down by 1.73% and Bankex down by 1.58% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharmaceutical Industries up by 1.37%, Bharti Airtel up by 0.50%, Larsen & Toubro up by 0.44%, Hindustan Unilever up by 0.39% and Adani Ports & SEZ up by 0.26%. On the flip side, Trent down by 3.70%, Mahindra & Mahindra down by 3.50%, Tech Mahindra down by 2.31%, Bajaj Finserv down by 2.10% and Kotak Mahindra Bank down by 1.92% were the top losers.

Meanwhile, domestic ratings agency ICRA in its latest report has said India’s banking sector is likely to see a moderation in credit growth in this financial year (FY27) largely due to ongoing conflict in West Asia and changing interest rate dynamics. It has projected bank credit growth to ease to below 12 per cent in FY27, down from 15.6 per cent achieved in FY26.

According to the report, rising geopolitical uncertainties would lead to an uptick in slippages from the small businesses and unsecured loan exposures. It noted that credit growth will moderate to 11-11.7 per cent, which will involve an expansion of up to Rs 25 lakh crore to take the overall outstanding credit to around Rs 237 lakh crore at the end of March 2027. It said that ‘deposit growth continued to lag the credit growth in FY26, but we saw some pickup towards the end of the fiscal year as banks started pushing to raise funds.’ It said the deposit mobilisation at finer rates remains a key challenge and noted that net interest margins will continue to be under pressure as the cost of deposits is not expected to decrease materially.

ICRA said banks' ability to raise deposits at better rates would be important for sustainable credit growth and adequate profitability, reminding that lenders have opted to draw down on surplus liquidity buffers in FY26, like reducing the excess statutory liquidity ratio (SLR) holdings to support credit growth. Going forward, it expects the ongoing geopolitical uncertainties to cast a shadow over MSMEs and unsecured retail loans, which would push up the slippage rate, leading to a slight increase in gross non-performing advances (GNPAs). Nonetheless, GNPAs would stay benign at 2.0-2.1 per cent in FY27. Overall, ICRA has maintained a stable outlook on the banking sector, citing adequate capitalisation, manageable asset quality risks, and steady profitability, despite a more complex global macroeconomic environment.

The CNX Nifty is currently trading at 24175.15, down by 202.95 points or 0.83% after trading in a range of 24134.80 and 24310.20. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Laboratories up by 9.86%, Cipla up by 5.56%, Jio Financial Services up by 4.10%, Adani Enterprises up by 1.89% and Apollo Hospitals Enterprise up by 1.44%. On the flip side, Trent down by 3.72%, Mahindra & Mahindra down by 3.49%, Shriram Finance down by 3.24%, SBI Life Insurance Company down by 2.80% and Tech Mahindra down by 2.35% were the top losers.

Asian equity markets were trading mostly in red; Nikkei 225 slipped 385.86 points or 0.65% to 59,200.00, Taiwan Weighted lost 164.32 points or 0.44% to 37,714.15, Hang Seng declined 171.24 points or 0.66% to 25,992.00, Straits Times fell 57.12 points or 1.14% to 4,945.60, Shanghai Composite weakened 13.01 points or 0.32% to 4,093.25 and Jakarta Composite plunged 147.47 points or 1.99% to 7,394.14, while KOSPI increased 57.88 points or 0.89% to 6,475.81.

European equity markets were trading mostly in red; UK’s FTSE 100 decreased 94.85 points or 0.91% to 10,381.61 and Germany’s DAX lost 167.4 points or 0.69% to 24,027.50, while France’s CAC rose 17.67 points or 0.22% to 8,174.10.