Benchmark equity indices ended lower on Tuesday as late selling pressure in heavyweight stocks such as HDFC Bank and Reliance Industries erased early gains amid mounting concerns over the rupee touching a fresh record low against the US dollar.
Investor sentiment was also weighed down by elevated global crude oil prices and ongoing geopolitical tensions. After trading firmly higher for most of the session, markets surrendered all intraday gains by the close. The 30-share BSE Sensex fell 114.19 points, or 0.15 per cent, to settle at 75,200.85.
During the session, the benchmark had climbed as much as 431.23 points, or 0.57 per cent, to touch 75,746.27 after US President Donald Trump stated that he had paused fresh strikes on Iran following requests from Qatar, Saudi Arabia, and the UAE, while indicating that talks with Tehran were progressing toward a possible agreement.
The broader NIFTY 50 also slipped 31.95 points, or 0.14 per cent, to close at 23,618. Among the major Sensex losers were Kotak Mahindra Bank, UltraTech Cement, Titan Company, Adani Ports and Special Economic Zone, Bharti Airtel, and Sun Pharmaceutical Industries.
On the other hand, technology stocks offered some support, with Infosys, HCL Technologies, Tech Mahindra, Eternal, and Tata Consultancy Services ending among the top gainers.
Meanwhile, the rupee weakened to an all-time low of 96.60 against the US dollar before settling at 96.52 (provisional). Global oil benchmark Brent crude was trading 1.80 per cent lower at USD 110 per barrel.
According to exchange data, Foreign Institutional Investors (FIIs) remained net buyers on Monday, purchasing equities worth Rs 2,813.69 crore. Most Adani Group stocks closed higher after the US Department of Justice permanently withdrew all criminal charges against industrialist Gautam Adani and his nephew Sagar Adani, bringing an end to a high-profile securities and wire fraud investigation in New York after prosecutors reportedly concluded the allegations could not be sustained.
“Domestic benchmark indices gave up their early gains and finished lower despite an initial rally driven by optimism surrounding a temporary pause in US military action against Iran.
Also read: Rupee settles at all-time low of 96.52 against USD
“IT stocks emerged as a key exception, posting strong gains due to expectations of benefits from the rupee’s sharp depreciation and attractive valuations,” said Vinod Nair, Head of Research at Geojit Investments.
Across Asian markets, South Korea’s Kospi and Japan’s Nikkei 225 ended lower, while China’s Shanghai SSE Composite and Hong Kong’s Hang Seng settled in positive territory.
European markets were also trading higher during afternoon deals. “Despite strong gains in IT stocks and favourable global cues in the first half, benchmark indices failed to hold on to higher levels as rising currency worries, elevated crude oil prices, and aggressive derivatives unwinding dragged markets lower by the close,” said Hariprasad K, Research Analyst and Founder of Livelong Wealth.
He added that the biggest concern for markets remained the persistent weakness in the rupee along with elevated crude oil prices. US markets had closed on a mixed note on Monday.
Trump had announced on his social media platform that he was postponing a planned military strike on Iran after requests from Gulf leaders. “I have been asked by the Emir of Qatar, Tamim bin Hamad Al Thani, the Crown Prince of Saudi Arabia, Mohammed bin Salman Al Saud, and the President of the United Arab Emirates, Mohamed bin Zayed Al Nahyan, to hold off on our planned military attack on Iran,” Trump wrote.
“We were preparing for a major strike tomorrow, but I have delayed it for now because discussions with Iran are progressing, and we will see where they lead,” he later told reporters at the White House.
In the previous trading session on Monday, the Sensex had gained 77.05 points, or 0.10 per cent, to close at 75,315.04, while the Nifty edged up 6.45 points, or 0.03 per cent, to settle at 23,649.95.
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