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Mumbai: Indian equity indices plunged Thursday, fuelled by a fresh US-Iran flare-up that sent Brent crude racing past $71 a barrel, exposing the import-dependent economy's vulnerability to rising oil prices amid a steady rupee retreat against the US dollar over the past 12 months. The NSE's Nifty fell 365 points, or 1.4% to close at 25,454.35. The BSE's Sensex declined 1,236.11 points, or 1.5%, to end at 82,498.14. Both the indices had opened marginally higher after ending firm for the past three trading sessions. "Market participants do not expect the tensions between the US and Iran to ease soon," said Pankaj Pandey, head of fundamental research, ICICI Direct. "In the near term, the Nifty could move toward the 25,200 level," he said. On the NSE, all sectoral indices had declined at close, while the 30-stock Sensex saw all stocks end lower on Thursday.128583946 Fear Gauge Climbs to 13.5 The declines led to a market cap erosion of Rs 6.4 lakh crore. The Volatility Index or VIX - the stock market's fear gauge - spiked over 10% to 13.5, indicating that traders see continued risks in the near term. Brent Oil April Futures have soared nearly $4 a barrel in the past two days to $71.2 on Thursday evening as the shadow of a US military strike on Iran over the stalled nuclear talks loomed over the oil market. A potential escalation of risks could choke the flow of crude through the Strait of Hormuz - a key route for the world's energy exports from the region. According to reports, Iran has shut the Strait briefly for military drills. Pandey said that crude prices may stay elevated in the coming weeks, which could affect multiple sectors of the Indian market, given that India is an oil-importing country, and trading may remain volatile. India imports about four fifths of its oil needs, and crude oil shipments dominate its import bills. The Indian rupee, already under the cosh due to the lingering tariffs dispute, could extend its run of losses and stoke risks of imported inflation should the price of oil in the global markets remain firm. Gold and silver prices were up 0.2% and 1.2%on Thursday evening. Elsewhere in Asia, Japan advanced 0.6%, and South Korea gained 3.1%. Financial markets remained shut in mainland China, Hong Kong and Taiwan for the Lunar New Year holiday. The pan-Europe index Stoxx 600 was down 0.6% at the time of going to print. At home, the broader market indices also declined on Thursday, as the Nifty Midcap 150 dropped 1.6% and the Nifty Small-cap 250 fell 1.2%.

Mumbai: Overseas investors funnelled the largest allocations into capital goods, financials and oil & gas shares in the first half of February as they pumped ₹33,487 crore across 15 sectors during the period - their highest fortnightly purchases since the second half of April 2025. Capital Goods shares received ₹8,032 crore in the period February 1-15, up from ₹2,761 crore in January, with the government's stake sale in BHEL worth ₹4,470 crore partly contributing to the inflows. "The capital goods sector has underperformed the market, and there was nothing negative in the budget on the sector which could have prompted global investors to reallocate funds," said Siddarth Bhamre, head of Research, Asit C Mehta Intermediates. Rajesh Singhla, CEO & Fund Manager, Alpha AIF, said sectors such as capital goods, textiles, gems and jewellery benefited from the US-India trade deal framework announced in the first week of the month, which is likely to have triggered foreign inflows. 128583222 Financial services saw foreign investment worth ₹6,175 crore in the first 15 days of February, after witnessing selling of ₹8,592 crore in January. Singhla said banks and financial services reported a strong set of numbers in the third quarter, which could have attracted foreign investment, though sector valuations are not very attractive. Foreign investors bought shares worth ₹4,678 crore in the oil & gas sector in the first half of February. Among sectors that saw selling, global investors dumped ₹13,812 crore across eight sectors in the first half of February, with IT accounting for over ₹10,000 crore of the total. The sector bore the brunt of foreign selling in 2025 as investors offloaded nearly ₹75,000 crore, the highest among sectors, amid worries about the impact of AI-related disruption on the software services exporters' prospects. "Fears of AI making the sector less labour-intensive could spark further selling," said Bhamre. "Overseas investors have shifted allocation from services to pockets in the real economy in this fortnight." The Nifty IT index has slumped almost 15% so far this year, while the benchmark Nifty is down 2.6% in the same period. "The foreign selling in IT stocks was due to fears of the earnings trending lower as the threat of disruptions due to AI loomed large, but most of the selling was sentimental, and the sell-off was an overreaction," said Singhla.