Markets ended lower on Tuesday as a sharp rise in crude oil prices brought inflation and energy-supply concerns back into focus, offsetting support from strong quarterly earnings and renewed foreign investor buying.
The BSE fell 388.19 points, or 0.49%, to close at 78,154.25, while the NSE Nifty 50 declined 112.10 points, or 0.46%, to 24,471.70. The benchmarks remained under pressure through most of the session after opening lower, with rising crude prices weighing on investor sentiment.
The Indian rupee also weakened against the US dollar, falling 0.14% to 95.4350. The currency was pressured by higher oil prices as hopes for a US-Iran deal to end the conflict and reopen the Strait of Hormuz faded.
Brent crude rose 2.22% to $89.67 a barrel, while WTI crude gained 2.36% to $84.07. The rise in oil prices renewed concerns for India, which depends heavily on imports to meet its crude oil requirements.
Higher crude prices can increase India’s import bill and add to inflation pressures, while also putting pressure on company margins. The latest rise came as uncertainty over the Strait of Hormuz and US-Iran negotiations continued to weigh on markets.
Vinod Nair, Head of Research, Geojit Investments Limited, said that the sharp rebound in crude prices shifted market attention back to inflation risks, tempering investor enthusiasm despite a supportive earnings backdrop.
“Concerns over the disruptions in the Strait of Hormuz and the U.S.-Iran negotiations kept sentiment guarded, particularly ahead of key inflation prints in India and the US. The resulting risk-off sentiment weighed on sectors most vulnerable to higher energy costs, while pharma and select IT names emerged as relative gainers. Nevertheless, robust foreign inflows and encouraging corporate earnings are limiting the downside risk,” he added.
The sectoral picture was mixed, although most major sectors remained under pressure. Nifty Pharma was the biggest gainer, rising 1.02%, while Nifty IT advanced 0.61%. Nifty Healthcare gained 0.32% and Nifty Consumer Durables rose 0.15%.
On the other hand, Nifty FMCG fell 1.17%, making it the biggest sectoral laggard. Nifty Metal declined 0.95%, while Nifty Realty dropped 0.99%. Nifty Auto fell 0.55%, Nifty Private Bank declined 0.56% and Nifty Financial Services 25/50 slipped 0.36%.
Some mid-cap segments remained relatively resilient. Nifty Midcap Healthcare rose 0.48%, Nifty Midcap Financial Services gained 0.40% and Nifty Midcap IT & Telecom advanced 0.49%.
Among the Sensex stocks, Eternal was the top gainer, rising 2.01%, followed by Infosys, which gained 0.46%. Titan advanced 0.33%, HCLTech rose 0.29% and TCS added 0.25%.
UltraTech Cement was the biggest loser, falling 2.75%. Axis Bank declined 1.52%, while IndiGo dropped 1.50%. Bharti Airtel fell 1.44%, Bajaj Finance lost 1.04% and Power Grid declined 1.03%. ITC, M&M, Tata Steel and Hindustan Unilever also ended lower.
The broader market was mixed. The Nifty Smallcap 100 gained 0.22%, while the Nifty Midcap 50 rose 0.07%. The Nifty Midcap 100 was almost flat, slipping 0.02%.
The Nifty 100 fell 0.40%, Nifty 200 declined 0.32% and Nifty 500 dropped 0.26%.
Despite Tuesday’s decline, strong quarterly earnings and foreign investor buying continued to provide some support to Indian equities. However, the direction of crude oil prices and developments around the Strait of Hormuz are likely to remain key factors for the market in the near term.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)