Benchmark equity indices extended their losses for a third consecutive session on Tuesday, with the Sensex declining nearly 493 points and the Nifty falling for the sixth straight day, as elevated crude oil prices and fading hopes of a diplomatic breakthrough in West Asia weighed heavily on investor sentiment.
The 30-share BSE Sensex fell 492.70 points, or 0.63 per cent, to settle at 77,235.46. The index remained under pressure throughout the session and slipped 493.80 points, or 0.63 per cent, to 77,234.36 towards the fag end of trading.
The broader NSE Nifty also extended its losing streak, declining 132.75 points, or 0.55 per cent, to close at 24,154.90. The benchmark index has now fallen for six consecutive trading sessions, reflecting the cautious mood prevailing in domestic equities.
Investors remained concerned about the impact of rising crude oil prices on India's external position, inflation outlook and corporate profitability. India is heavily dependent on imports to meet its crude oil requirements, making global oil prices an important factor for the domestic economy and financial markets.
Brent crude, the global oil benchmark, rose 0.17 per cent to USD 91.02 per barrel. The rise in oil prices came amid continued uncertainty surrounding developments in West Asia and diminishing expectations of an immediate diplomatic breakthrough.
Higher crude prices can increase India's import bill and put pressure on the country's trade balance and the rupee. A sustained increase can also complicate efforts to contain inflation and affect sectors that are particularly sensitive to fuel and transportation costs.
Market sentiment was further dampened by elevated US Treasury yields, which reduced the relative attractiveness of emerging-market assets. Higher US yields can encourage global investors to move funds towards dollar-denominated assets, putting additional pressure on emerging markets such as India.
Information technology stocks were among the major drags on the domestic benchmarks. Investors remained concerned that persistently high interest rates in major economies could weaken global economic activity and reduce technology spending, potentially affecting the outlook for Indian IT companies.
From the Sensex pack, Asian Paints, Infosys, HCL Technologies, Bharti Airtel, Tata Consultancy Services and Hindustan Unilever were among the prominent laggards. Weakness in large-cap technology stocks contributed significantly to the pressure on the benchmark.
On the other hand, some stocks managed to buck the broader trend. Axis Bank, Power Grid, Mahindra & Mahindra and Bajaj Finance were among the notable gainers, providing some support to the indices and preventing a sharper decline.
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Global market cues were mixed. In Asian trading, South Korea's Kospi and Japan's Nikkei 225 ended lower, reflecting continued caution among investors. In contrast, the Shanghai SSE Composite index and Hong Kong's Hang Seng closed marginally higher.
The domestic market has remained under pressure in recent sessions as investors assess a combination of geopolitical uncertainty, higher energy prices and global interest-rate conditions. The continued rise in crude oil prices has emerged as a particularly important concern for India given its high dependence on imported energy.
The Sensex's latest decline follows a 281.09-point fall on Monday, when it settled at 77,728.16. The Nifty had also declined 78.35 points to 24,287.65, extending its losing streak to five sessions at the time.
With the Nifty now declining for six consecutive trading days, investors are likely to closely monitor crude oil prices, developments in West Asia, global bond yields and overseas market trends for further direction. Continued volatility in these factors could keep domestic equities under pressure in the near term.
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