Crude surge, geopolitical jitters pull D-Street lower; Rupee hits month’s low

Markets snapped a three-session winning streak on Tuesday as escalating tensions in West Asia sent Brent crude prices surging past $85 per barrel, rattling investor sentiment and triggering broad-based selling across rate-sensitive and consumption-driven sectors.

Adding to the unease, attacks on two commercial vessels in the Strait of Hormuz brought the conflict uncomfortably close to home.

“Attacks on two commercial vessels in the Strait of Hormuz left one Indian seafarer dead and several others injured... Crude reacted instantly, touching near $85. The question now being asked is whether $100 is back in play,” said Sarvam Goel, Founder, Pocketful.

The Nifty 50 closed at 24,052, down 158 points or 0.66 per cent, while the BSE Sensex settled at 77,054, shedding 561 points or 0.72 per cent.

Both indices opened sharply lower and largely stayed under pressure through the session, ending near the day’s lows. The weekly derivatives expiry added to intraday volatility.

Selling was broad-based. Realty, PSU Banks, and Auto were the hardest-hit sectors, weighed down by elevated crude prices and inflation concerns. Pharma and Healthcare held firm, drawing defensive buying, while Metal stocks also closed higher on commodity strength.

Among individual Nifty constituents, Bharti Airtel, Apollo Hospitals, and Sun Pharma ended as top gainers.

HCL Technologies, which reported a 20 per cent jump in quarterly profit and record deal bookings, paradoxically closed around 4 per cent lower, the stock had already priced in expectations, and the absence of an upgraded guidance gave investors little reason to hold.

Broader markets bore the brunt more sharply. The Nifty Midcap 100 fell 0.44 per cent while the Nifty Smallcap 100 dropped 1.01 per cent. Market breadth was firmly negative, with the BSE advance-decline ratio at 0.55, and as many as 379 stocks in the Nifty 500 universe closing in the red.

The rupee had a rough session too, depreciating 58 paise to close at 96.20 against the US dollar, its weakest level in a month, underperforming most Asian peers.

Rising global bond yields, which could dampen inflows into the FCNR(B) scheme, added pressure beyond crude alone. Analysts see spot USD-INR heading toward 96.50 in the near term if geopolitical tensions persist.

On the macro front, India’s retail inflation climbed to 4.4 per cent year-on-year in June from 3.9 per cent in May, breaching the RBI’s 4 per cent target for the first time in nearly 18 months.

Wholesale price inflation also ticked up to 9.87 per cent. On a brighter note, India’s merchandise exports for April-June 2026 rose 11.4 per cent year-on-year to over $232 billion, with June alone posting $73.45 billion, up 9.5 per cent.

“Markets traded under pressure on Tuesday... Investor sentiment remained subdued following renewed escalation West Asia, which pushed Brent crude prices above the $85 per barrel mark and revived concerns over inflation,” said Ajit Mishra, SVP Research, Religare Broking.

Looking ahead, markets are likely to remain volatile, with crude prices, geopolitical developments, and the pace of FII flows as key monitorables.

The India-UK Comprehensive Economic and Trade Agreement takes effect Wednesday, July 15, which could lift sentiment in textiles, garments, footwear, and processed food sectors.

Earnings from Union Bank, HDFC Life, HDFC AMC, ICICI Lombard, and Angel One are also due, and could drive stock-specific action. US CPI, PPI, and China GDP data will be closely watched for broader directional cues.