Indian equity benchmarks ended Tuesday’s session under pressure, as escalating tensions in the Strait of Hormuz and a sharp fall in the rupee weighed heavily on investor sentiment.
While both benhcmarks, Sensex and Nifty, managed to recover the sharp losses incurred in the earlier half of the day, the indices failed to close in green.
The BSE Sensex closed the day just over 77k, crashing a little more than 250 points, while the NSE Nifty50 settled tradind near 24k, falling close to 100 points. Markets had opened weak and struggled to gain momentum through the day, reflecting heightened caution amid global uncertainties and rising crude oil prices.
Banking, IT Stocks Drag
Among Sensex constituents, ICICI Bank, Tech Mahindra, Axis Bank, Bharti Airtel, Larsen & Toubro, and Eternal were among the major laggards. On the other hand, Mahindra & Mahindra, UltraTech Cement, Bajaj Finserv, and Bajaj Finance emerged as key gainers, helping limit the downside.
Earnings Support Limits Downside
Despite the broader weakness, ongoing quarterly earnings offered some cushion to the markets.
“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,” said Vinod Nair, Head of Research, Geojit Investments Limited.
Global Cues Mixed
Asian markets were largely subdued, with key indices in Japan, South Korea, and mainland China closed for holidays. Hong Kong’s Hang Seng index ended lower. European markets were trading mostly higher, while US markets had closed in the red in the previous session.
Foreign Institutional Investors (FIIs) were net buyers in the previous session, purchasing equities worth Rs 2,835.62 crore. However, this support was not enough to offset broader concerns stemming from geopolitical uncertainty and rising oil prices.
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Geopolitical Tensions Drag Markets Lower
Renewed hostilities in the Strait of Hormuz emerged as the primary trigger for the day’s weakness.
Investor sentiment remained fragile as concerns mounted over potential disruptions to global energy supply routes. Analysts noted that developments in West Asia will continue to dictate near-term market direction.
“The market trend will be guided by the developments in West Asia particularly in the Strait of Hormuz. The resumption of hostilities in the Hormuz region and Brent crude again spiking to around $113 are headwinds for the market,” said V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
Rupee Hits Record Low, Adds To Selling Pressure
The rupee remained under pressure, slipping 2 paise to close at an all-time low of 95.25 (provisional) against the US dollar.
A weaker rupee, combined with elevated oil prices, intensified concerns around imported inflation and macroeconomic stability, prompting investors to remain cautious.
Domestic Triggers Provide Limited Support
Political developments provided some underlying support, with the BJP securing a decisive mandate in West Bengal, winning 206 seats and ending the TMC’s 15-year rule.
However, this positive domestic backdrop was overshadowed by global uncertainties and crude oil concerns.
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Previous Session Offered Gains
Markets had ended Monday on a positive note, with the Sensex rising 355.90 points to 77,269.40 and the Nifty gaining 121.75 points to close at 24,119.30.
The gains were driven by buying in blue-chip stocks and supportive domestic cues.
Markets are expected to remain volatile in the near term, with geopolitical developments, crude oil prices, and currency movements acting as key triggers. While domestic fundamentals remain supportive, sustained upside will depend on easing tensions in West Asia and stabilisation in global energy markets.