Markets snap 2-day rally to end lower amid spike in oil prices

The sharp rebound in Brent crude prices once again became a key pressure point for Indian equities

PTI mumbai

Market benchmark indices Sensex and Nifty snapped a two-day rally to end lower in a volatile trade on Tuesday following a spike in crude oil prices amid reports of fresh US military operations in southern Iran. Losses in financial and banking stocks amid a weak rupee further dragged the indices lower, traders said.  

The 30-share BSE Sensex declined 479.26 points, or 0.63%, to settle at 76,009.70.  Similarly, the 50-share NSE Nifty dropped 118 points, or 0.49%, to end at 23,913.70. 

"Near-term optimism around a potential US-Iran peace deal faded sharply following reports of US military operations in southern Iran, triggering a spike in crude prices and reversing the rupee's brief appreciation," Vinod Nair, Head of Research at Geojit Investments Limited, said. 

Fuel-intensive sectors such as aviation, paints, chemicals, logistics and cement are likely to face headwinds due to rising input costs, while oil marketing companies may continue to face margin pressure if crude oil prices remain elevated, Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services Ltd, said. 

"Markets initially traded with a stable undertone amid easing crude oil prices and supportive global cues. However, sentiment deteriorated sharply after reports of fresh US military strikes in Iran disrupted hopes of a near-term de-escalation in West Asia. The sudden shift in geopolitical sentiment triggered aggressive risk-off positioning across global markets and reignited fears of renewed energy supply disruptions," Hariprasad K, Research Analyst and Founder of Livelong Wealth, said. 

The sharp rebound in Brent crude prices once again became a key pressure point for Indian equities, he added.