Indian Equities Experience Broad Selloff: Sensex Falls 300 Points and Nifty Dips Below 23,900

Market Volatility: Sensex and Nifty Fall Amid US-Iran Peace Deal Uncertainty

The Indian stock market benchmarks Sensex and Nifty witnessed a decline on May 29, despite initial gains, due to uncertainty surrounding the US-Iran peace deal. At 10:49 am, the Sensex was up 56.98 points or 0.08% at 75,924.78, while the Nifty was down 15.45 points or 0.06% at 23,891.70. A total of 1,929 shares advanced, 1,664 shares declined, and 175 shares remained unchanged.

Market Decline Triggers

The US and Iran reached an agreement on Thursday to extend their ceasefire and lift restrictions on shipping through the Strait of Hormuz, but US President Donald Trump has yet to approve it. Iranian state media stated that the deal has not been finalized. The uncertainty surrounding the peace deal led to a decline in the market, with Brent crude futures dropping to $93 per barrel. In contrast, Asian markets saw a 2% jump in optimism over the US-Iran deal and AI rally.

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Weekly Performance

For the week, the Nifty and Sensex have seen an increase of 0.9% and 0.8%, respectively. However, the market's gain was short-lived, and the benchmarks fell 300 points from their day's high, with the Nifty trading below 23,900.

FII Selling and Crude Prices

Foreign investors sold shares worth Rs 1,040 crore ($108.70 million) on Wednesday, as per provisional data. This sale is part of a larger trend, with foreign investors offloading $24.3 billion of shares so far this year, exceeding the 2025 record annual outflows. The decline in Brent crude prices to below $93 is seen as a positive, with the potential for further declines if a deal between the US and Iran is reached. This could improve India's macros, which have been under pressure from the energy crisis, and stabilize the rupee, potentially restraining FPI outflows.

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Technical Analysis

Analysts believe that the Nifty needs to decisively trade above 24,000 for the market to trade higher. The initial trading range is expected to be 23,840-24,000, with low prospects of a vertical move on either side, even if a range breakout occurs. A larger range is seen as 23,500-24,450.