Mumbai– Indian equity markets closed in the red on Tuesday as investor sentiment weakened amid escalating geopolitical tensions in the Middle East and a sharp rise in crude oil prices, raising fresh concerns over inflation.
The sell-off followed strong comments from U.S. President Donald Trump, who warned Iran over its stance on the ongoing conflict, urging Tehran to reconsider a nuclear agreement with the U.S. The heightened tensions added to investor caution ahead of the U.S. Federal Reserve’s upcoming interest rate decision.
Both key indices opened flat and saw brief upward movement in early trade before succumbing to sustained selling pressure through the day. The Sensex declined by 212.85 points to close at 81,583.30, after dipping to an intra-day low of 81,427. The Nifty also slipped, losing 93.10 points to settle at 24,853.40.
“The benchmark indices witnessed moderate losses due to the rising risk of conflict escalation in the Middle East ahead of the Federal Open Market Committee (FOMC) meeting,” said Vinod Nair, Head of Research at Geojit Financial Services. “Higher Brent crude prices are a negative for India, which heavily relies on oil imports. This weighs on earnings expectations and dampens investor confidence.”
Broader indices followed suit. The Nifty Midcap100 fell 0.79 percent while the Nifty Smallcap100 dropped 0.82 percent.
Among sectors, only IT managed to close in the green. Pharma and metal stocks were the worst performers, with the Nifty Pharma index dropping 1.89 percent and metals declining 1.43 percent. Other sectors, including consumer durables, oil & gas, realty, auto, energy, FMCG, and media, registered losses of up to 1 percent.
On the Sensex, top laggards included Tata Motors, Sun Pharma, Bajaj Finance, IndusInd Bank, Bajaj Finserv, Eicher Motors, and Nestle India.
Meanwhile, Tech Mahindra, Infosys, Asian Paints, Maruti Suzuki, NTPC, TCS, and HCL Tech offered limited support with modest gains.
Sundar Kewat of Ashika Institutional Equity echoed concerns about oil-driven inflation. “India, being the second-largest oil importer globally, is particularly vulnerable to rising crude prices. This is fueling inflationary concerns and contributing to a risk-off mood among investors.”
The Indian rupee also weakened, sliding by 18 paise to 86.22 against the dollar, as global risk sentiment deteriorated due to Israel-Iran tensions.
With eyes now on the U.S. Fed’s rate decision scheduled for Wednesday, analysts expect continued volatility in both domestic and global markets in the near term. (Source: IANS)
