Sensex, Nifty fall as crude nears $90, US-Iran deal hopes fade; what's ahead?

Indian equity benchmarks declined on Tuesday amid renewed geopolitical concerns and a rise in crude oil prices. The 30-share BSE Sensex pack fell 388.19 points or 0.49 per cent to settle at 78,154.25, while the broader NSE Nifty50 index declined 112.10 points or 0.46 per cent to close at 24,471.70.

Sectoral participation remained largely negative, with FMCG, realty and metals among the top laggards. Pharma and IT stocks showed relative resilience.

In the broader market, Nifty Midcap100 ended 0.02 per cent lower, while Nifty Smallcap100 gained 0.22 per cent, indicating a mixed trend.

Among the major Sensex laggards were Bharti Airtel Ltd, Axis Bank Ltd, HDFC Bank Ltd, UltraTech Cement Ltd, Larsen & Toubro Ltd (L&T), Reliance Industries Ltd (RIL), Bajaj Finance Ltd, Mahindra & Mahindra Ltd (M&M), ITC Ltd and State Bank of India (SBI).

Ajit Mishra, SVP (Research) at Religare Broking, said, "Investor sentiment remained subdued amid a renewed rise in crude oil prices, with Brent crude moving towards the $90 per barrel mark as hopes of an early US-Iran agreement faded. Higher crude prices have revived concerns over imported inflation, the rupee, and corporate margins. Weak global cues and profit booking following the recent rally further weighed on market sentiment."

He added, "Given the combination of elevated crude prices, geopolitical uncertainty, and renewed pressure on financial heavyweights, we recommend maintaining a cautious, stock-specific approach, emphasising relative strength, disciplined position sizing, and prudent risk management."

Vinod Nair, Head of Research at Geojit Investments, said that a sharp rebound in crude prices had shifted market attention back to inflation risks, tempering investor enthusiasm despite a supportive earnings backdrop.

"Concerns over the disruptions in the Strait of Hormuz and the US-Iran negotiations kept sentiment guarded, particularly ahead of key inflation prints in India and the US. The resulting risk-off sentiment weighed on sectors most vulnerable to higher energy costs, while pharma and select IT names emerged as relative gainers. Nevertheless, robust foreign inflows and encouraging corporate earnings are limiting the downside risk," he also stated.

Sensex outlook

Sachin Gupta, VP - Technical Research at Choice Equity Broking, said, "Sensex formed a red bearish daily candle and is currently trading below the 200-day EMA, indicating some deterioration in the immediate technical structure. However, the index continues to trade well above its 20-day, 50-day and 100-day EMAs, suggesting that the broader medium-term trend remains relatively resilient. The broader outlook remains sideways, with the index caught between important support and resistance levels. Sustaining the 78,000–77,800 zone will be crucial to prevent further weakness, while a decisive move above 78,500–78,700 could restore positive momentum. Until a clear breakout or breakdown emerges, traders may prefer a cautious approach and closely monitor key levels for the next directional signal."

Nifty50 outlook

For Nifty, Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, said, "Going forward, the 200-day EMA zone of 24,390-24,350 will be a key support area. A decisive break below the 24,350 mark could accelerate the correction and drag the index towards 24,200 in the near term. On the upside, the 24,600-24,630 zone is expected to act as an immediate and crucial resistance hurdle. A sustained move above this band would be required to revive bullish momentum and pave the way for further upside."