Benchmark equity indices erased early gains and settled marginally flat on Wednesday as escalating geopolitical tensions in West Asia, weak global cues and profit booking at higher levels weighed on investor sentiment.
Investor sentiment remained cautious after tensions escalated in West Asia following fresh US strikes against Iran. Concerns over geopolitical instability and its impact on global growth and inflation kept investors on edge ahead of key US inflation data expected later in the day, which could influence the US Federal Reserve’s policy trajectory.
The BSE ended 64.42 points higher or 0.09 per cent at 73,983.18, while the dipped 27.15 points or 0.12 per cent to settle at 23,214.95.
Early optimism fades amid global uncertainty
after a muted opening, supported by easing crude oil prices and stable domestic financial conditions. However, sentiment deteriorated sharply in the second half after weak European market openings and renewed geopolitical concerns triggered profit booking across sectors.
Broader Asian markets also fell.
Ajit Mishra, SVP, Research at Religare Broking, said markets witnessed heightened volatility throughout the session, with heavyweight stocks reversing early gains and dragging benchmarks lower.
“Investor sentiment remained fragile amid rising geopolitical tensions in the Middle East following fresh developments involving the US and Iran, which initially pushed Brent crude prices higher. However, resilience in select heavyweight counters, particularly banking majors, helped limit the downside,” he said.
Vinod Nair, Head of Research at Geojit Investments Limited, said the investors turned cautious ahead of the US inflation print.
“Early gains were reversed due to profit booking, while subdued oil prices, despite fresh geopolitical developments, offered limited support. FMCG stocks outperformed on expectations of price hikes, and private banks advanced following the RBI’s easing of FCNR(B) and ECB norms, whereas metals lagged due to softer commodity prices,” Nair added.
Metals emerge as biggest drag
Sectorally, Media stocks witnessed significant pressure, while energy and realty counters traded weak. Metal stocks also fell amid weak global commodity prices, a stronger US dollar and concerns around slowing industrial demand in China, which weighed heavily on the sector.
Hindalco Industries, Tata Steel, Vedanta and Hindustan Zinc witnessed sharp selling pressure as investors moved away from cyclical sectors, Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth, said.
On the other hand, FMCG stocks outperformed the broader market amid expectations of price hikes, while private banking stocks gained after the Reserve Bank of India eased FCNR(B) deposit and ECB norms.
HUL, Nestle, Axis Bank, Kotak lead Nifty 50 gainers
Among the Nifty 50 constituents, Nestle India, Hindustan Unilever, Axis Bank, Kotak Mahindra Bank and ICICI Bank emerged as the top gainers. Hindalco Industries, Coal India, ONGC, Eternal and Tata Steel were among the top laggards.
Heavyweight banking stocks including HDFC Bank, Yes Bank and AU Small Finance Bank also witnessed buying interest following the RBI’s latest measures aimed at improving foreign currency deposit inflows.
Broader markets underperform
Broader markets remained under pressure throughout the session, with both midcap and smallcap indices declining over 1 per cent, reflecting weak risk appetite among investors.
Market breadth also remained negative. Of the 4,369 stocks traded on the BSE, 1,473 advanced, while 2,747 declined and 149 remained unchanged.
Around 115 stocks touched their 52-week highs, while 77 stocks hit fresh 52-week lows. Additionally, 150 stocks were locked in the upper circuit, whereas 191 hit the lower circuit.
Oil India, Manappuram Finance, IFCI dragged midcap & smallcap indices
In the midcap segment, Oil India plunged 10 per cent, while Kalyan Jewellers, IndusInd Bank and Hitachi Energy India declined between 3 per cent and 5 per cent. Coromandel International, SRF, Colgate-Palmolive India and Bharat Forge were among the notable gainers.
Among smallcaps, IFCI, Manappuram Finance and GE Shipbuilding dragged the index lower, while Chambal Fertilisers, Afcons Infrastructure and Syngene International posted gains.
On the BSE, Inox India, CarTrade Tech and Easy Trip Planners rallied between 11 per cent and 13 per cent, while Oil India, Avalon Technologies, IFCI and TD Power Systems declined between 7 per cent and 10 per cent.
The rupee settled marginally stronger at 95.2650 against the US dollar compared with its previous close of 95.35.
US markets largely settled in negative territory on Tuesday.
FIIs sold equities worth ₹4,566.03 crore on Tuesday, as per exchange data.
, Sensex rose 394.50 points or 0.54 per cent to close at 73,918.76, while the Nifty gained 119.10 points or 0.52 per cent to settle at 23,242.10.