Mumbai: Indian markets remained under pressure on Tuesday, with the Nifty ending lower for the sixth straight trading session, as the rebound in oil prices amid the lingering West Asia conflict and persistent volatility around the Closing Auction Session (CAS) kept traders on the toes.
NSE's Nifty fell 132.75 points, or 0.55%, to close at 24,154.9. The BSE Sensex declined 492.7 points, or 0.6%, to end at 77,235.46.
"Markets remained under pressure as there have been no positive cues from the US-Iran talks, especially with the MOU having expired and crude oil prices moving higher," said Shrikant Chouhan, head of equity research at Kotak Securities.
Brent crude October futures were trading near the $91-a-barrel mark on Tuesday and have remained in the $85-$90 range over the past week. Chouhan said oil sustaining above the $85 mark is a key concern, as it raises inflationary risks, which is already reflected in the sharp rise in US 10-year and 30-year bond yields. "We believe this could lead to outflows from both emerging and developed equity markets," he said.
The price adjustments on account of the CAS resulted in the benchmark indices dropping nearly 0.2% in the last 15 minutes before trade close.
Chouhan said the volatility seen during the CAS session is largely due to lower participation.
On Tuesday, FPIs net bought shares worth ₹1,651.5 crore. Domestic institutional investors were buyers to the tune of ₹2,579 crore. The Nifty Midcap 150 fell 0.4%, while the Nifty Smallcap 250 rose 0.2%. Of the total 4,530 stocks on the BSE, 1,890 advanced and 2,426 declined.
In Asia, Japan fell 2.5%, South Korea declined 1.55%, Taiwan dropped 1.2%, while China advanced 0.2% and Hong Kong rose 0.1%. The STOXX 600 index was down 0.5% at the time of going to press.
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Technical indicators suggest the indices could move in a band in the near term. "The market's sentiment has shifted, with the index now consolidating within the 24,000-24,500 range, and this phase of consolidation could continue over the next few trading sessions," said Dharmesh Shah, head of technical research at ICICI Securities.
Shah said after 1,100-point rally, the Nifty is undergoing a retracement and may find support in the 23,900-24,000 zone before resuming its upward trajectory towards the upper end of the channel at 24,500-24,600. "While Q1 earnings was better than expected, a decline in crude oil prices, a reversal in US 10-year bond yields, or a de-escalation of tensions in West Asia could act as positive catalysts and trigger the market's next rally," said Shah.
