Nifty, Sensex End Flat as Crude Oil Surge and US Fed Caution Weigh on Markets
Indian stock markets end flat as high Brent crude prices and US Fed policy caution offset global cues. See the top gainers and losers.
The Indian equity benchmarks witnessed a volatile trading session on Tuesday, ultimately closing marginally lower. The Nifty Sensex close flat trend was driven by a combination of skyrocketing crude oil prices and investor nervousness ahead of the upcoming US Federal Reserve policy announcement, which effectively neutralized supportive signals from global markets.
The Nifty 50 index ended the day at 22,749.75, marking a slight dip of 3.45 points or 0.02 per cent. Similarly, the BSE Sensex settled at 73,598.67, declining by 8.08 points, or 0.01 per cent.
Global Headwinds vs. Domestic Resilience
Market experts suggest that while global cues were generally supportive, the domestic market struggled under the weight of external pressures. Vinod Nair, Head of Research at Geojit Investments, noted that profit booking in key sectors like IT and private banks dragged the indices down. However, he highlighted that the broader market showed resilience, with selective domestic risk appetite keeping the indices from sliding further.
According to Nair, the market is currently being cushioned by two main factors:
- Robust domestic investment flows.
- Healthy second-quarter (Q2) corporate earnings.
The Crude Oil and Currency Crunch
One of the biggest concerns for investors is the price of Brent crude, which has surged to USD 116 per barrel. This spike poses a significant risk to inflation, corporate profit margins, and overall financing conditions in India.
The pressure has also extended to the currency market. Rajeev Sharan, Head of Research at Brickwork Ratings, pointed out that the Indian rupee has slipped, trading near the 95.30 level. He described the rupee as a "price-taker" this week, caught between a supply shock in the Gulf region and the anticipation of the rate call from Washington.
"The striking feature is that the pressure is now almost entirely external," Sharan remarked, adding that while global factors are driving the current direction, domestic buffers allow the RBI to ensure that market movements remain orderly.
Sectoral Performance: Winners and Losers
The NSE sectoral indices presented a mixed bag, showing a clear divide between struggling tech giants and surging pharma and auto stocks.
The Gainers
Several sectors managed to buck the trend and close in the green:
- Nifty Media: Jumped 3.58 per cent.
- Nifty Pharma: Climbed 1.72 per cent.
- Nifty Auto: Rose 1.20 per cent.
- Nifty Metal: Advanced 0.49 per cent.
- Nifty PSU Bank: Gained 0.19 per cent.
Among individual Nifty 50 stocks, the top performers included Tata Consumer, Bharti Airtel, BSE, Trent, and Bajaj Auto.
The Losers
On the flip side, the heavyweights in technology and banking faced selling pressure:
- Nifty IT: Declined by 0.81 per cent.
- Nifty Private Bank: Lost 0.39 per cent.
The list of top losers among Nifty 50 companies featured Cipla, ITC, Coal India, TCS, Adani Enterprises, and Infosys.
Commodities and Asian Markets
While crude oil remained elevated, precious metals saw a decline. Gold prices for 24-karat gold dropped 0.54 per cent to Rs 1,42,300 per 10 grams, and silver prices fell 1.49 per cent to Rs 1,92,877 per 10 kg.
Across Asia, markets closed with varied results. Japan's Nikkei 225 saw a significant gain of 1.85 per cent, and South Korea's KOSPI advanced by 3 per cent. Conversely, Hong Kong's Hang Seng index fell 1.15 per cent, and Singapore's Straits Times declined 0.35 per cent.
Looking ahead, analysts believe the trajectory of the Indian market will depend on the resilience of corporate earnings, the volatility of crude oil, developments regarding the West Asia crisis, and the policy signals emanating from the US Federal Reserve.