Benchmark equity indices declined by up to 1.20% on Thursday as reports of ceasefire violations by both sides resurfaced, unsettling investor sentiment amid mixed global cues. Additionally, profit-booking following Wednesday’s sharp rally weighed on the markets.
Brent crude futures rose by nearly $4 per barrel to $98.53, adding to inflationary concerns.
Fading Optimism
A day after a strong upmove driven by the two-week ceasefire announcement, the Sensex tumbled 931.25 points, or 1.20%, to close at 76,631.65, snapping its five-day winning streak. Similarly, the Nifty fell 222.25 points, or 0.93%, to settle at 23,775.10.
In the previous five sessions, the Sensex and Nifty had gained 7.80% (5,615.35 points) and 7.46% (1,665.95 points), respectively.
“Ceasefire-led optimism faded as renewed US–Iran tensions and continued disruptions around the Strait of Hormuz pushed crude prices higher, reviving concerns over India’s inflation outlook,” said Vinod Nair, Head of Research, Geojit Investments.
He added that domestically, profit booking, rising 10-year bond yields, and weakness in the rupee dampened near-term risk appetite.
Ankur Punj, MD & Business Head at Equirus Wealth, said domestic markets tracked global cues, with most markets ending in the red amid rising crude prices and persistent global uncertainty.
“Going forward, focus will shift to domestic corporate earnings and sectors likely to be impacted by higher crude prices,” Punj said, adding that investors will await clarity on whether the ceasefire will translate into meaningful negotiations before taking significant equity exposure.
Institutional Caution Returns
Overall market breadth remained largely neutral, with 2,165 gainers against 2,123 losers on the BSE. Investor wealth declined by Rs 72,251 crore to Rs 444.79 lakh crore, after having surged by Rs 33.10 lakh crore over the previous five sessions.
Continuing their selling streak, foreign portfolio investors offloaded shares worth Rs 1,711.19 crore ($185 million), while domestic institutional investors bought shares worth Rs 955.90 crore, as per provisional data from the BSE.
On the sectoral front, banks, financial services, and consumer durables were the top losers, while capital goods, metals, and power stocks emerged as the top gainers.
Among Sensex constituents, InterGlobe Aviation (IndiGo), L&T, Eternal, HDFC Bank, and ICICI Bank were the top laggards, while BEL, TCS, NTPC, Power Grid, and HCL Tech were the top performers.