Indian equity markets finished Tuesday on a distinctly weak note, with benchmark indices extending their recent decline amid persistent global and domestic uncertainties.
The Sensex fell 555.23 points, or 0.73%, to close at 75,577.58, while the Nifty 50 declined 144.05 points, or 0.61%, to end at 23,635.10.
Investor sentiment remained subdued as crude oil prices moved higher on renewed geopolitical tensions in the Middle East. The rise in oil prices increased concerns over inflation, import costs and pressure on the Indian rupee. The rupee weakened to around Rs 94.82 against the US dollar.
"Extending the slide to a seven-week low and maintaining the prevailing bearish trend, Indian equity markets ended trade significantly lower on Tuesday as elevated crude oil prices and persistent geopolitical uncertainty continued to weigh on investor sentiment," said Ponmudi R, CEO of Enrich Money, a SEBI - registered online trading and wealth tech firm.
On Tuesday, the equities in other key Asian markets also ended on a mixed and cautious note as rising crude oil prices and heightened geopolitical tensions in the Middle East weighed on investor sentiment. Japan’s Nikkei 225 declined sharply, while South Korea’s Kospi also finished lower. Hong Kong equities remained under pressure, whereas mainland Chinese shares managed to hold on to modest gains.
The broader market mood remained risk-averse as Brent crude moved closer to the US$ 100-per-barrel mark, raising concerns about inflation, economic growth and the outlook for global interest rates. A stronger yen added further pressure on Japanese exporters, while investors also remained cautious ahead of key US inflation data. Overall, the Asian session reflected a defensive stance, with geopolitical risks and energy-price concerns overshadowing positive developments in some regional markets.
Selling pressure in the Indian markets on Tuesday remained visible through the session. India' Volatiltiy Index (VIX) rose over 1.6%, signalling nervous positioning among traders, he added.
Mainly, the bank and financial services stocks led the losses, dragging the broader market lower even as select pockets tried to hold up. The sustained pressure in benchmark indices reflects a combination of elevated crude prices, geopolitical tensions and concerns over the possibility of tighter global monetary conditions. Overall, the market remains in a "sell on rise" mode, while DII buying remains the only real cushion preventing a sharper fall.
The Indian rupee remained under pressure today, weakening beyond the Rs 94.8-per-US dollar with the rupee remaining vulnerable to further increases in crude prices while RBI intervention could provide some downside support.
Globally, the biggest overhang is the escalating US-Iran standoff. This has kept energy prices the dominant macroeconomic concern, with WTI crude oil futures breaking above the $94-per-barrel mark and moving towards a three-month high. The sharp rise in crude prices reflects heightened geopolitical tensions and growing concerns over disruptions to global energy supplies. Brent crude has also moved closer to the $100-per-barrel level.
Defence stocks remained relatively firm following the government's approval of major defence procurement proposals.
Overall, the market closed with a cautious and bearish bias. Investors are likely to remain focused on crude oil movements, geopolitical developments, currency trends and global interest-rate expectations, which could continue to influence market direction in the near term.