Indian equity markets closed marginally lower on Tuesday as rising crude oil prices and renewed geopolitical tensions in West Asia prompted investors to book profits after a four-session rally. Although continued foreign institutional investor (FII) buying and gains in IT stocks offered some support, concerns over higher oil prices and mixed global cues weighed on market sentiment.
The Sensex declined 104.06 points (0.13 percent) to close at 78,180.72, while the Nifty 50 fell 31.75 points (0.13 percent) to settle at 24,398.70.
Broader markets also ended in the red, with the Nifty Midcap 100 falling 0.30 percent and the Nifty Smallcap 100 declining 0.55 percent.
The market capitalisation of BSE-listed companies dropped below ₹480 lakh crore from ₹482.3 lakh crore in the previous session, wiping out more than ₹2 lakh crore in investor wealth.
Investor sentiment weakened after renewed tensions between the US and Iran pushed global crude oil prices higher.
Key developments included:
Brent crude rose more than one percent to trade near $73 a barrel.
Reports suggested Iran fired missiles at commercial vessels passing through the Strait of Hormuz.
Fears of possible US retaliation heightened concerns over disruptions to global oil supplies.
Higher crude prices are seen as negative for India as they can increase inflation, widen the trade deficit and raise input costs for businesses.
After four consecutive sessions of gains, investors chose to lock in profits despite several positive domestic factors.
Supportive factors included:
Continued FII buying.
Healthy quarterly business updates from several companies.
Positive monsoon progress.
Buying in IT stocks ahead of the first-quarter earnings season.
However, rising crude prices, mixed global markets and stock-specific weakness outweighed these positives.
Information technology stocks emerged as the biggest gainers as investors positioned themselves ahead of the earnings season.
Top performers included:
HCL Technologies
Tech Mahindra
Infosys
The Nifty IT index gained 2.43 percent, making it the best-performing sector of the day.
Retail major Trent plunged nearly 12 percent after its first-quarter business update failed to meet market expectations.
Other major losers included:
Adani Enterprises
Adani Ports
Bharat Electronics (BEL)
Overall, 31 of the 50 stocks in the Nifty 50 index ended the session lower.
Most sectoral indices closed in negative territory.
Major losers:
Nifty Realty: -1.58 percent
Nifty Metal: -1.10 percent
Nifty Pharma: -0.73 percent
Nifty Bank: -0.16 percent
Sectors that ended higher:
Nifty IT: +2.43 percent
Consumer Durables: +0.89 percent
FMCG: +0.06 percent
The Indian rupee appreciated 49 paise to close at 94.94 against the US dollar, supported by sustained foreign fund inflows despite weakness in the equity market.
Market participants will closely track the following factors in the coming days:
Developments in the US-Iran conflict.
Movement in crude oil prices.
First-quarter corporate earnings.
Foreign institutional investor flows.
Global market trends.
While India's domestic economic fundamentals remain supportive, escalating geopolitical tensions and volatile crude oil prices could keep equity markets volatile in the near term.
