Brent crude spikes over 6% as Trump declares Iran ceasefire 'over'; Sensex, Nifty tumble 2%

Brent crude oil prices surged on Wednesday after US President Donald Trump said the ceasefire understanding with Iran was "over", reigniting concerns over geopolitical tensions in West Asia.

At last check, Brent crude futures were trading 6.09 per cent higher at $78.68 per barrel, while US West Texas Intermediate (WTI) crude gained $5.92 to $74.61 per barrel.

Trump said the memorandum of understanding (MoU) aimed at ending the conflict with Iran was "over" and added that he did not want to engage with Tehran.

The interim ceasefire understanding between Washington and Tehran was intended to provide a 60-day window for negotiations on a permanent agreement. However, indirect talks held in Qatar reportedly ended without any breakthrough, while the US military launched a fresh wave of strikes against Iran on Tuesday.

Reports of attacks on vessels in and around the Strait of Hormuz have also renewed worries over potential disruptions to one of the world's key energy trade routes.

The spike in crude weighed on equity markets across Asia, including India. Domestic benchmarks BSE Sensex and NSE Nifty50 fell more than 2 per cent each in afternoon trade as investors turned risk-averse.

Among Sensex constituents, InterGlobe Aviation (IndiGo's parent), Hindustan Unilever (HUL), Maruti Suzuki, ITC, Asian Paints, Bharti Airtel, Bajaj Finance, Reliance Industries (RIL), UltraTech Cement and Axis Bank were among the biggest laggards. All 30 Sensex stocks were trading in negative territory.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the renewed geopolitical uncertainty has interrupted the market's recent recovery.

"With the renewed US-Iran tensions and the consequent spike in Brent crude, markets are again back in uncertain territory. How long this would last and what its consequences would be are now in the realm of uncertainty," he said.

He noted that Indian equities had been gradually strengthening on the back of sustained foreign institutional investor (FII) buying and improving macroeconomic fundamentals, but the latest developments have temporarily clouded that positive outlook.

"Therefore, investors have to wait and watch the developments," Vijayakumar added.

Echoing a similar view on Brent, Maulik Patel, Head of Research at Equirus Securities, said renewed US-Iran concerns and escalating geopolitical tensions in West Asia have once again brought crude oil prices and their implications for India's economy and corporate earnings into sharp focus.

Meanwhile, according to provisional NSE data, foreign institutional investors (FIIs) were net buyers of Indian equities worth Rs 468 crore in the previous session, while domestic institutional investors (DIIs) were net sellers of Rs 248.72 crore.