Indian benchmark indices, Sensex and Nifty, experienced a marginal dip as escalating crude oil prices, renewed US-Iran tensions, and a hawkish US Federal Reserve outlook dampened investor sentiment, overshadowing strong domestic economic growth.
Illustration: Dominic Xavier/Rediff
Key Points
- Indian benchmark indices, Sensex and Nifty, ended marginally lower, influenced by rising crude oil prices and geopolitical tensions.
- Fresh US-Iran tensions and expectations of a prolonged tighter monetary policy by the US Federal Reserve contributed to negative investor sentiment.
- Despite India’s robust 7.8 per cent GDP growth in the April-June quarter, global uncertainties are weighing on market performance.
- Major laggards among Sensex firms included Maruti, State Bank of India, and Axis Bank, while ITC and HCL Tech saw gains.
- Foreign Institutional Investors (FIIs) offloaded equities worth Rs 7,985.88 crore, indicating cautious sentiment towards Indian assets.
Market benchmark indices Sensex and Nifty ended marginally lower on Tuesday as elevated crude oil prices and fresh US-Iran tensions weighed on investor sentiment.
Growing expectations that the US Federal Reserve could keep monetary policy tighter for longer are also weighing on risk appetite across emerging markets, an expert said.
Market Performance Overview
The 30-share BSE Sensex ended flat, down 12.99 points, or 0.02 per cent, to settle at 76,944.28.
At 3:12 pm, the benchmark was at the 76,685.48 level, down 271.79 points, but recovered most of the losses during the Closing Auction Session (CAS), which was introduced by the Securities and Exchange Board of India (Sebi) from August 3 in a phased manner.
During the day, the benchmark dropped 301.15 points, or 0.39 per cent, to 76,656.12.
The 50-share NSE Nifty slipped 24.60 points, or 0.10 per cent, to end at 24,055.80 on the weekly expiry day.
The Nifty was also down almost 100 points at 23,980.55 at 3:20 pm.
Top Gainers and Losers
Among the 30 Sensex firms, Maruti, State Bank of India, InterGlobe Aviation, Bajaj Finserv, Mahindra & Mahindra and Axis Bank were the major laggards.
ITC, HCL Tech, Infosys and Bharti Airtel were among the winners.
Brent crude, the global oil benchmark, jumped 2.03 per cent to $92.33 per barrel.
Expert Insights and Global Factors
“Markets are increasingly balancing India’s strong growth momentum against mounting global uncertainties.
Better-than-expected GDP growth underscores the resilience of domestic demand and the broader economy.
“However, escalating geopolitical tensions in the Middle East and a more hawkish Federal Reserve have renewed concerns about inflation and the prospect of elevated interest rates for an extended period,” Vinod Nair, Head of Research, Geojit Investments Ltd, said.
India’s economy grew at a faster-than-expected 7.8 per cent in the April-June quarter, showing resilience in the face of concerns that the war in Iran and resulting global uncertainty could weigh on domestic economic momentum.
In Asian markets, South Korea’s Kospi ended higher, while Japan’s Nikkei 225, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng index settled lower.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 7,985.88 crore on Monday, according to exchange data.
