Nifty, Sensex close marginally lower amid inflation worries, IT stocks shine

MUMBAI: Domestic equity markets closed with marginal losses on Tuesday as investor sentiment remained cautious amid concerns over inflationary pressures, elevated crude oil prices and ongoing geopolitical tensions in West Asia. The Nifty 50 index closed at 23,618 with a decline of 31.95 points or 0.14 per cent, while the BSE Sensex ended at 75,200.85, down by 114.19 points or 0.15 per cent.

Market experts said that although there was initial optimism after reports suggested the United States had temporarily halted plans for military action against Iran, caution returned later in the session.

Vinod Nair, Head of Research at Geojit Investments, said domestic equity indices erased early gains and ended in the red despite the positive global cues. “Domestic equity indices pared early gains to close in the red, despite an initial upswing fueled by optimism surrounding a temporary halt in U.S. military operations against Iran,” he said.

He added that IT stocks remained a major exception during the session and witnessed strong gains due to expectations of benefits from the weakening rupee and attractive valuations. According to Nair, mid-cap and small-cap stocks also outperformed large-cap stocks after witnessing corrections earlier.

He further stated that although fourth-quarter earnings reflected resilience in the domestic economy, market participants are increasingly worried about inflation risks and the possibility of earnings downgrades in the coming quarters.

Vikram Kasat, Head Advisory at PL Capital, said markets witnessed a relief-driven session supported by improved investor risk appetite after reports suggested the United States had called off plans to strike Iran. He added that easing crude oil prices also supported sentiment during the day by reducing concerns over inflation and India’s import bill.

“Yet the sentiments were still cautious in the backdrop of geopolitical events and movements in oil prices,” Kasat said.

On the sectoral front, the NSE indices showed mixed trends. Nifty IT emerged as the top gainer with a rise of 3.23 per cent. Nifty Realty gained 1.43 per cent, while Nifty PSU Bank advanced 0.81 per cent. Nifty Consumer Durables rose 0.44 per cent, Nifty Pharma gained 0.42 per cent and Nifty Auto closed higher by 0.29 per cent. Oil and Gas index also ended with gains of 0.16 per cent.

On the losing side, Nifty Private Bank declined 0.74 per cent, Nifty Metal slipped 0.05 per cent and Nifty FMCG closed marginally lower by 0.03 per cent. Meanwhile, Brent crude oil prices moderated slightly but remained elevated. At the time of filing this report, Brent crude was trading at $109 per barrel, down by 2 per cent.

Gold prices continued to remain firm, rising 0.26 per cent to Rs 1,59,876 per 10 grams for 24 karat gold. Silver prices stood at Rs 2,73,954 per kilogram.

Other Asian markets showed mixed trends on Tuesday. Japan’s Nikkei 225 index declined 0.66 per cent to close at 60,419, while Taiwan’s weighted index fell 1.78 per cent to 40,175 level. South Korea’s KOSPI index also declined 3.36 per cent to 7,271 level. However, Singapore’s Straits Times index surged 1.51 per cent to close at 5,072, while Hong Kong’s Hang Seng index gained 0.46 per cent to settle at 25,793 level. (ANI)