MUMBAI: Domestic equity markets closed lower on Tuesday as investor sentiment weakened sharply after renewed US military operations involving Iran dampened optimism surrounding a possible peace agreement in West Asia. The NSE Nifty 50 index closed at 23,913.70, down 118.00 points or 0.49 per cent, while the BSE Sensex ended at 76,009.70, declining 479.26 points or 0.63 per cent.
Market experts said the renewed geopolitical tensions and concerns over energy supply disruptions weighed heavily on investor confidence. Ponmudi R, CEO of Enrich Money said “The renewed strain on ceasefire efforts and continuing disruptions around the Strait of Hormuz revived fears of a prolonged energy crisis, with investors increasingly concerned that sustained supply disruptions could trigger another sharp repricing in global oil markets and intensify broader macroeconomic risks”.
He further said, “In the near term, investors are likely to remain highly focused on developments surrounding the US-Iran negotiations and the durability of the ceasefire, with any further escalation carrying the potential to revive volatility across global markets and risk assets”.
According to market participants, recent optimism around a possible diplomatic breakthrough weakened significantly after reports of renewed US and Israeli military actions involving Iranian-linked vessels in the Strait of Hormuz. The sentiment was further impacted after indications emerged that negotiations may still take several more days, raising concerns over the fragility of the ceasefire process.
Additional caution also emerged following reports that Israeli Prime Minister Benjamin Netanyahu plans to intensify strikes on Hezbollah in Lebanon, adding to broader geopolitical uncertainty.
Indian equities remained among the most affected regional markets due to India’s dependence on West Asia energy supplies. Sector-wise, heavy selling pressure was witnessed across most sectors on the NSE. Nifty Financial Services declined 0.59 per cent, Nifty PSU Bank fell 0.46 per cent, Nifty Private Bank lost 0.62 per cent and Nifty Realty declined 0.52 per cent. Nifty Media also closed lower by 0.24 per cent.
Among the few gainers, Nifty Auto ended marginally higher by 0.07 per cent, Nifty FMCG gained 0.14 per cent and Nifty Metal rose 1.10 per cent. On the currency front, the Indian rupee weakened again against the US dollar and moved above the Rs 95.5 mark as the dollar regained strength amid fading peace optimism.
Brent crude prices remained elevated though below the USD 100 per barrel mark and were trading around USD 99 per barrel at the time of filing this report. In commodities, gold prices moderated to Rs 1,57,861 per 10 grams for 24 karats, while silver prices declined more than 2 per cent to Rs 2,70,600 per kg.
Most Asian markets also closed lower amid global uncertainty. Japan’s Nikkei 225 index declined 0.39 per cent to 64,904, Singapore’s Straits Times lost 0.82 per cent to close at 5,028, Hong Kong’s Hang Seng index slipped 0.08 per cent to 25,586 and Taiwan’s weighted index declined 0.27 per cent to 43,525. South Korea’s KOSPI was the only major Asian market to close higher, gaining more than 2 per cent to 8,047. (ANI)
