Sensex falls 243 points, Nifty slips 64 points as foreign outflows and crude prices weigh

Indian equity markets ended lower on Tuesday, with persistent foreign investor outflows, elevated crude oil prices and high US Treasury yields keeping investors cautious. The pace of IPO fundraising also added pressure by absorbing liquidity from the market.

The Nifty 50 closed at 22,716.20, down 64.05 points or 0.28 per cent. The BSE Sensex settled at 72,529.07, declining 242.65 points or 0.33 per cent.

Vinod Nair, Head of Research at Geojit Investments, said domestic equities continued to face correction-led pressure due to volatile crude prices, elevated US Treasury yields and continued foreign institutional investor (FII) outflows.

“Domestic equities continue to face correction-led headwinds amid volatile crude prices, U.S. Treasury yields hovering near two-decade highs, and persistent FII outflows exerting pressure on the rupee,” Nair said.

He added that the unprecedented pace of IPO fundraising was absorbing incremental liquidity, while investor risk appetite remained subdued amid a hawkish global backdrop and increasing expectations of further rate hikes later in the year.

IT and consumer durables lead sectoral losses

Among sectoral indices on the NSE, Nifty IT declined 1.56 per cent, while Nifty Consumer Durables fell 2.14 per cent.

Nifty Realty dropped 1.25 per cent, Nifty Auto declined 0.83 per cent and Nifty FMCG lost 0.88 per cent.

Nifty Private Bank fell 0.13 per cent, while Nifty Oil and Gas declined 0.49 per cent. Nifty PSU Bank, Nifty Pharma, Nifty Metal and Nifty Media ended higher.

Crude remains elevated despite marginal decline

Brent crude oil prices fell 0.47 per cent to USD 105 per barrel at the time of reporting. Despite the decline, crude prices remained elevated compared with their longer-term levels, keeping inflation and corporate cost concerns in focus.

Riyank Arora, Associate Vice President – HNI & Derivatives at Hedged.in, said the market's decline appeared to be routine profit booking, provided key support levels held.

“Today's dip looks like routine profit booking rather than a change in trend, provided the key supports hold. The larger picture still favours the bulls. A buy-on-dips approach in quality names, backed by disciplined risk management, remains the sensible way to play this”.

Asian markets end lower

Other Asian markets also closed lower on Tuesday.

Japan's Nikkei 225 fell 1.43 per cent to 64,950, while Singapore's Straits Times declined 0.25 per cent to 5,714.

Hong Kong's Hang Seng dropped 0.73 per cent to 24,465, Taiwan's weighted index declined 0.82 per cent to 47,631, and South Korea's KOSPI lost 0.28 per cent to 6,870.