Stock markets decline as elevated crude oil prices weigh on sentiment; Sensex drops 388 points

MUMBAI: Benchmark indices Sensex and Nifty ended lower on Tuesday as a sharp rally in crude oil prices due to geopolitical uncertainties dented investors' sentiment.

The 30-share BSE Sensex dropped 388.19 points, or 0.49 per cent, to settle at 78,154.25. During the day, it tanked 494.18 points, or 0.62 per cent, to 78,048.26.

The 50-share NSE Nifty declined 112.10 points, or 0.46 per cent, to end at 24,471.70.

From the Sensex pack, UltraTech Cement, Axis Bank, InterGlobe Aviation, Bharti Airtel, Bajaj Finance and Power Grid were among the major laggards.

Eternal, Infosys, Titan, HCL Tech, and Tata Consultancy Services were the gainers.

Brent crude, the global oil benchmark, jumped 2.18 per cent to USD 89.63 per barrel.

"Indian equity benchmarks ended lower on Tuesday, with both Sensex and Nifty declining around 0.5 per cent and the Nifty 50 slipping below the 24,500-mark, as a rebound in crude oil prices and volatility associated with the weekly F&O expiry weighed on investor sentiment," Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a Research Analyst firm, said.

The dominant headwind for the session remained the renewed surge in global oil prices, he added.

"Markets traded under pressure on Tuesday, extending their cautious tone amid renewed geopolitical concerns and rising crude oil prices. Investor sentiment remained subdued amid a renewed rise in crude oil prices, with Brent crude moving towards the USD 90 per barrel mark as hopes of an early US-Iran agreement faded," Ajit Mishra - SVP, Research, Religare Broking Ltd, said.

The BSE SmallCap Select index edged higher by 0.38 per cent, while MidCap Select index ended marginally lower by 0.01 per cent.

Among sectoral indices, Hospitals dropped 1.82 per cent, realty (1.03 per cent), FMCG (0.87 per cent), commodities (0.80 per cent), power (0.54 per cent) and capital goods (0.47 per cent).

Focused IT, Housing Finance, IT, Energy and Consumer Discretionary were the winners.

In Asian markets, South Korea's KOSPI ended higher, while Shanghai's SSE Composite index and Hong Kong's Hang Seng index settled lower. Equity markets in Japan were closed due to a holiday.

"A sharp rebound in crude prices shifted market attention back to inflation risks, tempering investor enthusiasm despite a supportive earnings backdrop. Concerns over the disruptions in the Strait of Hormuz and the US-Iran negotiations kept sentiment guarded, particularly ahead of key inflation prints in India and the US," Vinod Nair, Head of Research, Geojit Investments Ltd, said.

Markets in Europe were trading on a mixed note. US markets ended lower on Monday.

Foreign Institutional Investors (FIIs) bought equities worth Rs 1,974.76 crore on Monday, according to exchange data.

On Monday, the Sensex was up 43.27 points, or 0.06 per cent, and settled at 78,542.44. The Nifty went up marginally by 13.15 points, or 0.05 per cent, to end at 24,583.80.