Axis Bank, HDFC Bank, ICICI Bank Share Price Fall As Iran War Fuels Inflation Fears; Nifty Bank Drops Nearly 2%

Banking stocks came under heavy selling pressure on Wednesday as investors turned cautious due to the ongoing conflict in West Asia. The Nifty Bank index fell around 1,052 points or 1.8% during intraday trading on the National Stock Exchange of India.

By around 1:30 PM, the index was still down about 1.5%, compared to a 1.14% fall in the Nifty 50.

Major Banking Stocks Decline

Among banking stocks, Axis Bank was the biggest loser, falling around 3.3% during the session.

Other banking stocks also saw declines, including:

• HDFC Bank
• ICICI Bank
• Kotak Mahindra Bank
• IndusInd Bank
• Federal Bank
• YES Bank
• State Bank of India

Shares of AU Small Finance Bank, Canara Bank, Bank of Baroda, and Punjab National Bank also declined slightly.

Why Rising Oil Prices Hurt Bank Stocks

Higher energy prices usually have a negative impact on the banking sector for several reasons:

1. Slower economic growth may reduce demand for loans.
2. Higher inflation may force central banks to keep interest rates elevated.
3. Rising bond yields could reduce banks’ treasury income.
4. Asset quality risks may increase if businesses and households face financial stress.

Because banks hold large amounts of government bonds, rising yields can lead to mark-to-market losses on their portfolios.

Read More:YES Bank Share Price in Focus; Appoints Vinay Muralidhar Tonse as MD and CEO! 

Foreign Investors Continue Selling

Another factor affecting banking stocks is selling by foreign investors.

Foreign Institutional Investors (FIIs) hold a significant share in the banking and financial services sector, with holdings of around 32.4% of total assets under custody.

So far in March 2026, foreign investors have sold Indian equities worth about ₹32,849 crore, which has added pressure on bank stocks.

Conclusion

Banking stocks declined sharply as investors worried about rising inflation and economic risks due to the Iran conflict and possible oil supply disruptions. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

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