Benchmark indices, the Sensex and Nifty, dipped on Wednesday following an initial rise, amid volatile market conditions as investors expressed caution due to geopolitical uncertainties and new foreign fund outflows.
Recent US military actions in southern Iran have dampened expectations for a swift diplomatic resolution, raising concerns regarding potential disruptions in energy supply, as noted by Hariprasad K, Research Analyst and Founder of Livelong Wealth.
In early trading, the 30-share BSE Sensex increased by 127.83 points to reach 76,137.53, while the 50-share NSE Nifty rose 36.45 points to 23,950.15. However, the momentum could not be sustained, with the BSE Sensex trading 77.80 points lower at 75,935.11, and the Nifty decreasing by 29.15 points to 23,897.80 later in the day.
Among the 30 Sensex companies, major laggards included HDFC Bank, Bharat Electronics, Infosys, InterGlobe Aviation, Axis Bank, and Reliance Industries. Conversely, stocks such as NTPC, Power Grid, Eternal, and UltraTech Cement posted gains.
Brent crude, the global oil benchmark, saw a 1.56 percent decline, trading at USD 98 per barrel.
In Asian markets, South Korea’s Kospi and Japan’s Nikkei 225 traded upwards, while Shanghai’s SSE Composite and Hong Kong’s Hang Seng index were down.
“Global sentiment remains fragile as geopolitical tensions in West Asia dominate risk appetite. The recent US military strikes in southern Iran have underscored concerns over energy supply disruptions,” Hariprasad K remarked.
US markets finished mostly higher on Tuesday. According to exchange data, Foreign Institutional Investors (FIIs) sold off equities worth ₹2,407.87 crore on Tuesday, indicating growing risk aversion.
“Despite occasional optimism regarding a potential agreement, the overarching geopolitical situation is fluid and could reverse suddenly. Investors are likely to remain selective and cautious, with sentiment shifting in response to geopolitical developments,” commented Ponmudi R, CEO of Enrich Money, a wealth-tech firm.
FIIs have recently returned to net selling in several sessions, emphasizing persistent caution towards emerging markets amidst a volatile global landscape. On Tuesday, the Sensex fell by 479.26 points, or 0.63 percent, closing at 76,009.70, while the Nifty decreased by 118 points, or 0.49 percent, to end at 23,913.70.
