Indian equity benchmarks slipped on Tuesday, weighed down by fresh geopolitical tensions in West Asia and a weakening rupee, even as the brief optimism around recent state election outcomes faded.
At around 11:29 am, the BSE Sensex was down over 600 points, trading near 76,650, while the Nifty 50 fell around 150 points to hover just above the 23,900 mark.
Heavyweights such as IndiGo, Tech Mahindra, NTPC, Asian Paints and UltraTech Cement led the losses, each declining around 1%. In contrast, stocks like Mahindra & Mahindra, Adani Ports and ITC managed modest gains.
Broader markets showed relative resilience, with midcap and smallcap indices trading marginally higher.
Geopolitical tensions weigh on sentiment
Investor sentiment took a hit after renewed hostilities between the United States and Iran raised concerns over stability in the Strait of Hormuz, a critical global oil supply route.
Rising geopolitical risks have kept crude oil prices elevated, even though Brent crude eased to around $113 per barrel. Analysts warned that sustained high oil prices could widen India’s import bill and stoke inflationary pressures.
The Indian rupee weakened further, hitting a record low of 95.39 against the US dollar. Jateen Trivedi, VP – Research Analyst (Commodity and Currency) at LKP Securities, told The Economic Times that elevated oil prices are limiting any meaningful recovery in the currency.
Sectoral trends and global cues
Banking stocks were among the biggest losers, with PSU and private bank indices declining up to 0.4%, dragging the broader banking index lower. On the other hand, pharma and realty stocks posted mild gains.
Market volatility remained contained, with India VIX easing slightly to around 18.30.
Globally, cues remained weak. Asian markets, including Hong Kong’s Hang Seng, traded lower, while European indices such as France’s CAC and Germany’s DAX ended the previous session sharply down. Wall Street benchmarks also closed in the red.
Focus shifts back to global factors
Market experts said that the positive sentiment from recent election results, including gains by the BJP in West Bengal, is unlikely to provide sustained support.
Also Read | What industrialists expect from Bengal’s next government?
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, told The Economic Times that the near-term direction of markets will be dictated by developments in West Asia, oil price movements and global bond yields, along with corporate earnings.
He added that rising US bond yields and continued currency pressure could weigh on foreign investor flows, even as recent buying by foreign institutional investors offers some support.
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