Benchmark stock market indices ended lower on Tuesday, as a sharp fall in the rupee to record lows and continued concerns around elevated crude oil prices weighed on investor sentiment, even as earnings offered some support.
The BSE Sensex fell 251.61 points, or 0.33%, to close at 77,017.79, while the Nifty 50 declined 86.50 points, or 0.36%, to settle at 24,032.80.
Markets remained volatile through the session, with early losses persisting as global uncertainties and currency weakness overshadowed the optimism seen after recent election results.
Vinod Nair, Head of Research at Geojit Investments Limited, said that domestic equities witnessed a volatile session, closing lower as post-election optimism faded and sentiment re-aligned with global weakness amid rising geopolitical tensions.
“Elevated crude prices continued to pressure the rupee, which slipped to record lows. Despite these headwinds, the ongoing earnings season, with results slightly ahead of expectations, provided some support and triggered selective bottom-fishing,” he added.
RUPEE HITS RECORD LOW, DRAGS SENTIMENT
The Indian rupee slid to a fresh all-time low during the day amid rising geopolitical tensions in the Middle East.
The currency weakened to 95.43 per dollar, down as much as 0.4% intraday, before recovering slightly to end at around 95.28. The fall comes as tensions between the US and Iran escalated again, raising concerns over disruptions in the Strait of Hormuz, a key global oil supply route.
A weaker rupee raises import costs, especially for crude oil, and tends to dampen foreign investor sentiment, putting pressure on equities.
OIL PRICES ADD TO PRESSURE
Crude oil prices remained elevated, adding to market concerns.
Brent crude was trading near $113.01 per barrel, while WTI crude was around $104.26, despite some easing during the day. Oil prices have surged in recent sessions due to supply concerns linked to the Middle East conflict.
Higher oil prices are negative for India as they push up inflation, increase input costs for companies and impact economic growth.
SECTORAL TREND MIXED
Sectoral performance remained mixed.
Buying was seen in FMCG, IT, pharma and auto stocks. The Nifty FMCG index rose 0.64%, while Nifty Auto gained 0.63%. IT and pharma indices also ended slightly higher.
On the other hand, financials and realty stocks were under pressure. The Nifty Private Bank index fell 0.67%, while the realty index declined 1.41%. Consumer durables and oil & gas indices also ended lower.
Broader markets showed some resilience despite weakness in benchmark indices.
The Nifty Midcap 100 rose 0.17% and the Nifty Smallcap 100 gained 0.28%. Meanwhile, India VIX, which measures market volatility, eased 2.14% to 17.91.
WHAT NEXT FOR MARKETS
Going ahead, markets are expected to remain sensitive to global developments, especially the situation in the Middle East and its impact on oil prices.
“Going ahead, market direction is likely to stay sensitive to geopolitical developments and incremental cues from upcoming earnings,” said Nair.
The movement of the rupee and foreign investor flows will also be key factors to watch. In the near term, corporate earnings and management commentary will continue to drive stock-specific action.
Overall, while domestic factors offered some support, global risks and currency weakness kept markets under pressure at the close.
