Indian equities ended sharply lower on Tuesday, extending their recent losing streak as investors turned cautious amid rising crude oil prices, renewed tensions in the Middle East and persistent selling in technology stocks. The Sensex fell 492.70 points, or 0.63%, to close at 77,235.46, while the Nifty 50 declined 132.75 points, or 0.55%, to settle at 24,154.90.
The weak session marked the sixth consecutive fall for the Nifty and the third straight decline for the Sensex. The selling pressure was visible from the opening bell, with the Sensex falling more than 250 points and the Nifty slipping below the 24,250 level in early trade. The indices remained under pressure through most of the session, with investors reluctant to take fresh positions as global risks continued to build.
The biggest concern for the market was the renewed rise in crude oil prices. Brent crude moved above $91 a barrel as uncertainty surrounding the Iran-US conflict increased. The prospect of oil remaining expensive for longer has raised concerns for India because the country remains heavily dependent on imports to meet its energy needs. Higher crude prices can put pressure on inflation, the current account balance and corporate margins, making investors more cautious about Indian equities.
The geopolitical situation also weighed on sentiment. Hopes of a quick peace agreement in the Middle East have weakened, leaving markets vulnerable to further swings in energy prices and global risk appetite. European and Asian markets also traded lower, while US equity futures pointed to a weak opening. The Stoxx Europe 600 was down 0.5%, S&P 500 futures fell 0.5% and Nasdaq 100 futures declined 1.3%, according to market data during the Indian session.
Another pressure point was the rise in US Treasury yields. The US 10-year bond yield climbed to 4.73%, making dollar-denominated assets more attractive and potentially reducing the appeal of emerging-market equities. This comes at a time when foreign investors have already been cautious about Indian stocks. The combination of higher US yields, expensive crude and geopolitical uncertainty has created a difficult backdrop for foreign institutional flows.
Information technology stocks were among the major losers on the benchmarks. Infosys and HCL Technologies fell around 2% during the session, adding to the pressure on the Nifty. The IT sector has remained sensitive to global growth expectations, currency movements and developments in the US economy. With global markets showing signs of caution, investors continued to reduce exposure to technology counters.
Among the gainers, defence stocks stood out as strong performers. Shares of companies including Paras Defence and Garden Reach Shipbuilders & Engineers surged after the government notified its sixth indigenisation list covering 405 items that will be sourced only from Indian suppliers. The announcement strengthened expectations of continued domestic demand for defence manufacturers and triggered sharp buying in several related stocks.
Select pharma, healthcare, auto and consumer durables stocks also managed to stay in the green, offering some cushion to the broader market. Sun Pharma, Maruti Suzuki and Tata Motors were among the notable gainers, while oil and gas and certain chemical stocks saw intermittent buying interest as well, even as overall sentiment remained weak.
On the losing side, IT stocks led the decline, followed by pressure in select metal counters such as Tata Steel and broader technology-linked names. Weak global cues and concerns over growth outlook kept investors away from riskier segments of the market.
The broader market also struggled, although the decline was less severe than in the benchmark indices. Nifty Midcap 100 and Nifty Smallcap 100 ended lower by up to around 0.4%, reflecting a cautious mood beyond the large-cap segment.
The rupee also remained under pressure. The Indian currency closed at ₹95.68 against the US dollar, compared with ₹95.6025 in the previous session. It had opened at ₹95.6625, with market participants watching for possible intervention by the Reserve Bank of India as the currency stayed close to record-weak levels.
The bond market reflected similar concerns. Indian government bond yields moved higher in early trade as crude oil prices crossed $90 a barrel. The benchmark 6.94% 2036 bond yield rose three basis points to 6.8407%. Rising oil prices can complicate the inflation outlook and influence expectations around interest rates, adding another layer of uncertainty for investors.
There were also several stock-specific developments during the day. Paytm saw a large block transaction involving about 3% of its equity, with 1.92 crore shares changing hands at ₹1,535 apiece, amounting to roughly ₹2,950 crore. Separately, Milky Mist gained sharply after its market debut, touching the upper circuit and trading well above its IPO price.
Despite the weak headline numbers, analysts pointed out that domestic liquidity could provide some support if the market sees deeper declines. Domestic institutional investors have continued to offer a cushion as foreign investors remain cautious. The underlying Indian economy and expectations of an improvement in corporate earnings also provide some support, although near-term trading is likely to remain volatile.