Nifty slips for second day as crude, geopolitics weigh; broader market holds firm
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Benchmarks declined for the second consecutive session, with the Nifty 50 down 0.21% and the Sensex falling 238 points, influenced by high crude oil prices and ongoing geopolitical tensions. Despite this, the broader market showed resilience, with midcap and smallcap indices gaining, and positive earnings reports from the auto sector. Investors should remain cautious as markets are expected to stay range-bound, with key earnings and geopolitical developments on the horizon.
Benchmarks declined for the second consecutive session on Tuesday, weighed down by elevated crude oil prices hovering near $90 a barrel, persistent foreign institutional selling, and escalating tensions in West Asia as the US-Iran conflict entered its tenth consecutive day, with Yemen’s Houthis threatening a naval blockade on Saudi Arabia.
The Nifty 50 settled at 24,187, down 50 points or 0.21 per cent, while the Sensex fell 238 points to close at 77,470. The session marked the second straight day of the benchmark trading within a narrow range, just 127 points, its tightest band since July 10. Over the past 25 sessions, Nifty has oscillated between 24,530 and 23,785, with key moving averages flattening and momentum indicators remaining subdued.
“Tuesday had a lot of competition for attention, earnings, expiry, and geopolitics all landing on the same session, and the index chose to lean weak,” said Sarvam Goel, Founder of Pocketful, adding that “...the dip was minor and absorbed easily.”
HDFC Bank and Infosys were the session’s biggest drags, with HDFC Bank declining for the second straight day following its earnings. Shriram Finance, Bajaj Finserv, and Eicher Motors were among the top gainers. Sectorally, Auto led the rally, buoyed by blockbuster quarterly numbers, Bajaj Auto reported a 46 per cent jump in net profit to ₹3,226 crore with revenue up 37 per cent YoY, while TVS Motor posted its highest-ever quarterly sales with profit rising 51 per cent to ₹1,174 crore. Realty, Chemicals, and Cement also closed in the green, while PSU Banks, IT, and Oil & Gas ended lower.
The broader market told a different story from the headline indices. The Nifty Midcap 100 gained 0.30 per cent and the Nifty Smallcap 100 advanced 0.53 per cent, with market breadth remaining positive, 275 of the Nifty 500 stocks closed in the green, and the BSE advance-decline ratio stood at 1.08.
On the currency front, the rupee recovered 21 paise to close at 96.23 against the dollar, aided by encouraging FCNR flow data from the RBI and steady capital inflows, even as elevated crude prices continued to exert broader pressure. WTI crude traded near $83 a barrel.
On the macro front, the IMF trimmed India’s FY27 GDP growth forecast by 10 basis points to 6.4 per cent, citing elevated crude prices and El Niño risks, while raising the FY28 estimate to 6.7 per cent. India’s core infrastructure output, however, accelerated to a five-month high of 5 per cent YoY in June. SBI Funds Management made its market debut, listing at roughly a 7 per cent premium after its IPO was oversubscribed over 40 times.
Looking ahead, markets are expected to remain range-bound and stock-specific. Key earnings on Wednesday, including Adani Power, Nestlé India, SRF, and Eternal, along with the European Central Bank’s policy decision and any diplomatic developments on the US-Iran front, will be closely watched for directional cues. Three mainboard IPOs, Lohia Corp, Indo-MIM, and Xtranet Technologies, with a combined issue size of approximately ₹5,079 crore, are also set to open for subscription this week.
Original Article
Published on Hindu BusinessLine