Indian markets closed lower on Tuesday as a sharp increase in crude oil prices revived concerns over inflation and energy supplies, offsetting the positive impact of strong quarterly earnings and renewed buying by foreign investors.
The BSE Sensex declined 388.19 points, or 0.49%, to end at 78,154.25, while the NSE Nifty 50 fell 112.10 points, or 0.46%, to close at 24,471.70. Both benchmark indices remained under pressure for most of the session after opening lower, with rising crude prices weighing on investor sentiment.
The Indian rupee also weakened against the US dollar, declining 0.14% to 95.4350. The currency came under pressure from higher oil prices as expectations of a US-Iran agreement to end the conflict and reopen the Strait of Hormuz weakened.
CRUDE OIL BACK IN FOCUS
Brent crude climbed 2.22% to $89.67 a barrel, while WTI crude rose 2.36% to $84.07. The jump in oil prices renewed concerns for India, which relies substantially on imports to meet its crude oil requirements.
Expensive crude can raise India’s import bill and increase inflationary pressures while also squeezing corporate margins. The latest rise came amid continued uncertainty surrounding the Strait of Hormuz and the US-Iran negotiations.
Vinod Nair, Head of Research at Geojit Investments Limited, said the sharp rebound in crude prices redirected market attention towards inflation risks, limiting investor optimism despite a favourable earnings environment.
He said concerns over potential disruptions in the Strait of Hormuz and the US-Iran negotiations kept investors cautious, particularly ahead of key inflation data from India and the US. The resulting risk-off sentiment affected sectors that are more exposed to higher energy costs, while pharmaceutical and select IT stocks performed relatively better. Strong foreign inflows and encouraging corporate earnings, however, continued to limit the downside.
PHARMA, IT OFFER SOME SUPPORT
Sectoral performance remained mixed, although most major indices ended in negative territory. Nifty Pharma emerged as the biggest gainer, advancing 1.02%, while Nifty IT increased 0.61%. Nifty Healthcare gained 0.32% and Nifty Consumer Durables rose 0.15%.
Nifty FMCG was the biggest laggard, falling 1.17%. Nifty Metal declined 0.95%, while Nifty Realty dropped 0.99%. Nifty Auto slipped 0.55%, Nifty Private Bank fell 0.56% and Nifty Financial Services 25/50 declined 0.36%.
Some mid-cap segments remained relatively steady. Nifty Midcap Healthcare rose 0.48%, Nifty Midcap Financial Services gained 0.40%, while Nifty Midcap IT & Telecom advanced 0.49%.
Among Sensex constituents, Eternal was the top performer, gaining 2.01%, followed by Infosys with a 0.46% rise. Titan advanced 0.33%, HCLTech gained 0.29% and TCS increased 0.25%.
UltraTech Cement emerged as the biggest decliner, falling 2.75%. Axis Bank dropped 1.52%, while IndiGo declined 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 finished lower.
The broader market delivered a mixed performance. The Nifty Smallcap 100 rose 0.22%, while the Nifty Midcap 50 gained 0.07%. The Nifty Midcap 100 remained almost unchanged, slipping 0.02%.
The Nifty 100 declined 0.40%, Nifty 200 fell 0.32% and Nifty 500 dropped 0.26%.
Despite Tuesday’s decline, strong quarterly earnings and continued foreign investor buying provided some support to Indian equities. However, crude oil price movements and developments surrounding the Strait of Hormuz are expected to remain important factors influencing market sentiment in the near term.
