Indian equity markets faced a sharp decline on Thursday, with the Sensex dropping around 1,400 points and the Nifty falling approximately 2%. This downturn followed US President Donald Trump's warning of imminent military action against Iran, stating that the US would 'hit them extremely hard' in the coming weeks. The announcement spooked investors, who had anticipated a resolution to the conflict. The MSCI gauge of emerging market Asia equities fell 2.3%, and the currency index eased 0.2%. Brent crude oil prices surged about 5% to $105 per barrel, adding to inflationary pressures in India. The ongoing geopolitical tensions have led to sustained foreign outflows, with FPIs selling shares worth ₹8,331 crores on April 1st. Analysts are concerned that the extended conflict could disrupt fuel supplies through the Strait of Hormuz, a critical route for energy imports. Despite the turmoil, some sectors, like auto, showed resilience, with March sales figures indicating strength. However, brokerages are sending mixed signals, with Nomura downgrading Indian equities to neutral, while Jefferies noted attractive valuations for the Nifty index. The uncertainty surrounding the situation in Iran continues to weigh heavily on market sentiment.