Indian stock markets came under pressure on Tuesday, August 25, as investors remained cautious amid higher crude oil prices, rising tensions between the United States and Iran and uncertainty ahead of the monthly derivatives expiry. The benchmark Sensex fell nearly 200 points in morning trade, while the Nifty 50 slipped below the important 24,150 level.
At around 9:58 am, the Sensex was down 0.24% at 77,184.66, while the Nifty fell 0.32% to 24,142.25. The Nifty later touched 24,136, while the Sensex dropped below 77,150 as selling pressure increased. The fall came after both indices ended lower in the previous session.
The market opened weak as investors reacted to renewed concerns over the impact of US sanctions on Iran. Washington has announced tougher economic measures against Tehran, while Iran has warned of retaliation. The possibility of further pressure on Iranian oil supplies has kept crude prices elevated and added to worries about inflation and India’s import bill.
Brent crude futures were trading around $92.50 a barrel on Tuesday. Higher crude prices are important for India because the country imports a large part of its oil requirement. A sustained rise in oil prices can increase costs for companies, put pressure on inflation and weigh on the Indian rupee.
The weakness was broad-based, although market breadth improved as the session progressed. Fourteen of the 16 major sectoral indices were trading lower in early trade. Metal and information technology stocks faced notable selling pressure. The Nifty Metal index fell around 0.6% in early trade, while the Nifty IT index declined about 0.4%.
Later in the morning, the Nifty Metal index was down 0.90%, while Nifty IT fell 0.66%. Nifty Energy declined 0.56%, Auto dropped 0.54% and Oil & Gas fell 0.51%. Media and PSU Bank stocks were among the few sectors trading higher, gaining 0.35% and 0.23%, respectively.
Among individual Nifty 50 stocks, Adani Enterprises emerged as the top gainer at one point, rising 1.05% to ₹3,030.10. Eternal gained 0.64%, Trent rose 0.57%, Adani Ports advanced 0.40% and Max Healthcare added 0.35%. In another update later in the session, Eternal was up 0.72%, Trent 0.69%, Adani Ports 0.63%, SBI Life Insurance 0.50% and Bharti Airtel 0.34%.
On the losing side, Cipla was down 1.20%, making it the biggest Nifty 50 loser in the latest market update. Hindalco Industries declined 1.13%, HCL Technologies fell 0.91%, Tech Mahindra slipped 0.85% and Tata Motors Passenger Vehicles lost 0.78%. IT stocks were particularly weak, with HCL Technologies and Tech Mahindra among the stocks facing selling pressure.
Banking stocks also showed a mixed trend. AU Small Finance Bank was among the strongest performers in the banking space, gaining around 1.8%. Union Bank of India rose 0.79%, while ICICI Bank and Canara Bank posted smaller gains. On the other hand, IndusInd Bank declined 0.82%, Federal Bank fell 0.88%, Kotak Mahindra Bank lost 0.47% and HDFC Bank was down around 0.40% in one of the morning updates.
The broader market also remained subdued. At one stage, the Nifty Midcap 100 was down 0.13%, while the Nifty Smallcap 100 fell 0.29%. India VIX, which measures expected market volatility, eased 0.61% to 11.46 in late-morning trade, indicating that investors were cautious but there was no major panic in the market.
One of the biggest stock-specific moves came from Hindustan Copper. The stock fell around 6.5% after the government announced an offer to sell up to a 6% stake in the company. The offer was priced at a 10.5% discount to the previous closing price, putting pressure on the shares.
Great Eastern Shipping, meanwhile, gained around 2% after its board announced that it would consider a share buyback proposal. The development gave the stock a boost even as the broader market remained weak.
Investors were also watching the derivatives market closely. Tuesday marked the monthly expiry of Nifty 50 derivatives, which can lead to sharp intraday movements because of futures and options positions. Market participants were also monitoring the impact of the new closing auction session, which is being tested during the monthly expiry.
From a technical perspective, 24,150 has emerged as an important support level for the Nifty. Analysts have identified the 24,000-24,100 zone as the next support area if selling intensifies. On the upside, 24,300-24,400 is seen as an important resistance range, while 24,500 remains a stronger resistance level.
The direction of the Indian stock market is likely to depend on crude oil prices, developments involving the US and Iran, global market cues and foreign investor activity. With the Nifty trading close to the 24,150 support level, investors are likely to watch closely for signs of recovery or further selling pressure as the trading session progresses.