Talks in New York aimed at ending the conflict in West Asia have failed to produce a breakthrough. However, crude oil prices eased after Saudi Arabia resumed oil movement through the Red Sea and tanker traffic through the Strait of Hormuz improved significantly.
At the same time, expectations of a US Federal Reserve rate hike in October have softened. For the Indian market, however, heavy selling by foreign investors in both equities and debt continues to remain a major concern.
GIFT Nifty closed at 22,838.50 in derivative trading at GIFT City on Tuesday night. It slipped to 22,787 early Wednesday before recovering. The trend suggests that the Indian market could open on a weak note.
Indirect talks between the US and Iran, mediated by Qatar, ended without an agreement.
Around 80% of the crude oil volumes that moved through the Strait of Hormuz before the conflict are now reportedly passing through the route again. Iran’s own crude exports, however, remain severely disrupted.
The US appears unwilling to offer major concessions under the present circumstances. Washington’s view is that Iran now has a greater need to ease restrictions in Hormuz.
There is also uncertainty over whether Iran’s Islamic Revolutionary Guard Corps, which wields significant influence over key strategic decisions, would accept a compromise.
Although Iran’s grip over the Strait of Hormuz has weakened, it still retains the ability to keep Gulf countries under pressure.
Iran is also believed to have stockpiled crude on tankers in the Indian Ocean and elsewhere ahead of the restrictions. That inventory could run down by mid-October, raising concerns that mounting pressure could push Tehran towards more aggressive steps.
Improved crude oil availability has eased some inflation concerns.
US bond yields, which had surged to their highest levels since 2002, fell sharply from record highs.
Markets also took comfort from comments by the New York Federal Reserve president, who indicated that there was no need to rush into another rate hike.
The probability of an October rate increase by the US Federal Reserve has consequently fallen to 49% from 71%.
Markets are now focused on the Personal Consumption Expenditures inflation data. If the reading does not show a sharp rise, expectations are that the next rate hike could be pushed to December.
Markets are currently pricing in inflation of around 3.7%.
US equities closed lower on Tuesday as concerns over the war and the broader economy persisted.
However, Saudi Arabia’s decision to resume oil exports through the Red Sea helped ease some of the market anxiety.
US job openings fell to 7.08 million in August, below expectations of 7.23 million and down from 7.34 million in July. The weaker labour market data also helped reduce fears of an immediate rate hike.
The Dow Jones Industrial Average fell 131.59 points, or 0.26%, to 51,349.92. The S&P 500 declined 12.85 points, or 0.17%, to 7,670.84, while the Nasdaq Composite slipped 22.84 points, or 0.09%, to 26,797.54.
US stock futures were slightly higher in early trade. Dow futures gained 99 points, or 0.19%, while S&P 500 futures rose 10 points, or 0.13%. Nasdaq futures were up 27 points, or 0.09%.
In the New York ADR market, HDFC Bank gained 1.03% during regular trading and rose another 0.71% in extended trade to close at $22.80.
ICICI Bank fell 0.18% during regular trading and remained unchanged in extended trade at $27.25.
Infosys gained 1.14% during regular trading but slipped 0.19% later to close at $10.62.
Wipro declined 0.62% during market hours before gaining 0.52% in extended trade to close at $1.6183.
European equity markets moved in different directions on Tuesday. French, British and Spanish markets ended lower, while Germany’s benchmark index and the Stoxx 600 posted marginal gains.
Most Asian markets were trading higher on Wednesday. Japan’s Nikkei gained 1.25%, while South Korea’s Kospi rose 1%.
Australia’s benchmark index advanced 0.15% and Taiwan gained 1.40%.
Hong Kong’s Hang Seng slipped 0.40%, while China’s Shanghai Composite gained 0.22%. China’s factory activity indicator improved in September, marking its first increase in three months.
Indian equities witnessed another weak session on Tuesday, though the indices recovered some of their early losses. The Sensex fell as low as 72,064 while the Nifty touched 22,569 during the session. The indices also saw sharp volatility during the closing auction amid pressure linked to derivative settlement.
Global concerns over crude oil prices and interest rates, domestic worries over agricultural output losses and persistent foreign investor selling continue to weigh on sentiment.
Foreign investors are selling not only equities but also debt securities, adding pressure on the rupee.
Most sectoral indices ended lower. Metals, pharma and healthcare were among the few sectors that gained. Realty, IT, capital markets, consumer durables, FMCG, oil and defence shares declined.
NSE shares rose 0.37% but still closed below the IPO price at ₹1,769.30. BSE Ltd will enter the Nifty 50 index, replacing Wipro. BSE shares gained 3.31%, while Wipro fell 2.33%.
Tata Group shares came under pressure after Tata Trusts proposed a restructuring that could help Tata Sons avoid a public listing. A Tata Sons listing is generally expected to unlock value for listed Tata Group companies holding stakes in the group holding company.
Market breadth remained weak. On the BSE, 1,925 stocks advanced while 2,462 declined. On the NSE, 1,515 shares gained and 2,024 ended lower.
Foreign portfolio investors remained heavy sellers, recording net sales of ₹9,980.22 crore in the cash market. Domestic institutional investors and mutual funds together made net purchases of ₹6,952.71 crore.
The Sensex closed 242.65 points, or 0.33%, lower at 72,529.07.
The Nifty 50 declined 64.05 points, or 0.28%, to 22,716.20.
Bank Nifty slipped 211.70 points, or 0.39%, to 54,259.95.
The Nifty Midcap 100 fell 594.80 points, or 0.99%, to 59,319.40, while the Smallcap 100 lost 151.55 points, or 0.81%, to end at 19,193.55.
Gold prices rose on Tuesday as concerns over further interest rate hikes eased. Gold gained 1.63%, or $67, to close at $4,183.10 an ounce. It eased slightly to around $4,170 in early trade on Wednesday.
In Keralam, 22-carat gold fell by ₹200 per sovereign on Tuesday to ₹1,09,120.
Silver also gained, rising 1.35% to $61.59 an ounce. Platinum was at $1,702, palladium at $1,211 and rhodium at $8,400.
Rubber prices declined again in the international market, while domestic prices in Keralam remained firm. In Bangkok, RSS-1 was quoted at $280.70 per quintal and RSS-3 at $277.30.
In Keralam, RSS-4 remained at ₹27,900 per quintal.
Weak Chinese demand continues to weigh on international rubber prices despite lower production.
Most industrial metals traded lower, with zinc and tin among the exceptions. Copper fell 0.48% to $14,474.35 a tonne. Aluminium declined 0.66% to $3,230.50 a tonne.
Lead and nickel also fell, while zinc and tin moved higher.
Cocoa prices dropped 4.20% to close at $5,354 a tonne, although futures remained above $5,600. Production is estimated to decline by 20% in Ivory Coast and 17% in Ghana.
Arabica coffee rose 1.37% to $2.927 a pound. Brazil’s coffee output for the 2026 season is estimated to have increased by 19.6%.
Palm oil fell 0.86% to 4,624 Malaysian ringgit a tonne.
The US Dollar Index closed higher at 101.37 on Tuesday and rose further to 101.43 in early Wednesday trade. The euro weakened to $1.1339 and the pound slipped to $1.3228.
The Japanese yen weakened to 156.91 against the dollar, while the Chinese yuan moved to 6.70 per dollar. The yield on the US 10-year Treasury fell sharply to 5.243% from 5.555%.
The rupee remained broadly stable on Tuesday, supported by intervention from the Reserve Bank of India.
The dollar rose to ₹96.08 in early trade before RBI intervention helped the rupee recover. The dollar eventually closed unchanged from the previous session at ₹95.98. In the offshore forward market, the dollar slipped to ₹95.88 before moving back to around ₹95.98 in early Wednesday trade.
The Chinese yuan strengthened to ₹14.32, while the euro slipped to ₹108.81.
Crude oil prices retreated on Tuesday after climbing above $107 a barrel in the previous session. Brent crude fell 2.6% to close at $102.59 a barrel.
It recovered slightly to $103.32 in early Wednesday trade. WTI crude was trading at $89.52 a barrel.
Cryptocurrencies moved lower after gaining earlier in the session.
Bitcoin slipped below $83,400 in early Wednesday trade. Ether fell below $2,675, while Solana dropped below $119.
(September 29)
Sensex: 72,529.07, down 0.33%
Nifty 50: 22,716.20, down 0.28%
Bank Nifty: 54,259.95, down 0.39%
Nifty Midcap 100: 59,319.40, down 0.99%
Nifty Smallcap 100: 19,193.55, down 0.81%
Dow Jones: 51,349.92, down 0.26%
S&P 500: 7,670.84, down 0.17%
Nasdaq Composite: 26,797.54, down 0.09%
US dollar: ₹95.98
Gold: $4,183.10 an ounce, up $67
Gold in Keralam: ₹1,09,120 per sovereign, down ₹200
Brent crude: $102.59 a barrel, down 2.69%