Sensex, Nifty close lower as crude oil, geopolitical risks weigh

Indian share markets ended lower on Monday, with the Sensex and Nifty declining by nearly 1%. The fall was attributed to surging crude oil prices and escalating geopolitical tensions in West Asia, which dampened investor sentiment across sectors.

Domestic share markets closed lower on Monday as rising crude oil prices and ongoing geopolitical tensions in West Asia weighed on investor sentiment, keeping risk appetite subdued. The NSE Nifty 50 index ended at 23,842.65, down by 207.95 points or 0.86 per cent, while the BSE Sensex closed at 76,847.57, declining by 702.68 points or 0.91 per cent.

Market Drivers and Analyst Commentary

Market analysts noted that despite some support from last week's ceasefire framework, uncertainty around global developments continues to dominate sentiment. Vinod Nair, Head of Research at Geojit Investments, said, "Markets continue to derive limited support from last week's ceasefire framework, which remains intact for now and is encouraging selective buying interest along with a buy-on-dips approach."

He added that markets initially reacted negatively to the breakdown of US-Iran peace talks and the announcement of a US naval blockade in the Strait of Hormuz, which pushed crude oil prices above USD 100 per barrel. "Elevated oil prices are raising concerns around inflation, currency stability, and broader macro balances, thereby weighing on overall sentiment," he said.

Sectoral Performance

Sectorally, selling pressure was visible across most indices. Nifty Auto declined by more than 2 per cent, while Nifty IT fell 1.16 per cent. Nifty FMCG was down by 1.29 per cent, and Nifty Pharma slipped 0.29 per cent. Nifty Private Bank also ended in the red, while the Nifty Oil and Gas index declined 1.41 per cent on the NSE.

US Blockade and Oil Price Impact

Crude oil prices remained elevated, with Brent crude trading at around USD 102 per barrel, up more than 7 per cent on Monday, adding to concerns over inflation and global economic stability.

The pressure in the markets further exaggerated after the statement released on Truth Social by President Trump that the United States Navy would begin intercepting vessels in the region immediately to prevent Iran from profiting from the passage. "Effective immediately, the United States Navy, the Finest in the World, will begin the process of BLOCKADING any and all Ships trying to enter, or leave, the Strait of Hormuz," Trump stated in a social media post. The US President indicated that while the goal is to return to a status where all ships are allowed passage, the current blockade is necessary due to Iranian actions and claims regarding maritime mines.

Domestic and Global Cues

On the domestic front, the ongoing Q4 earnings season is driving stock-specific movements, although overall market sentiment remains cautious amid global uncertainty.

Global cues also remained weak, with most Asian markets closing in negative territory. Japan's Nikkei 225 index declined 0.75 per cent to 56,500, while Hong Kong's Hang Seng index fell 0.69 per cent to 25,716. South Korea's Kospi dropped 0.87 per cent to 5,808, and Singapore's Straits Times index slipped 0.11 per cent to 4,984. Taiwan was the only major market in the region to close higher, with the Taiwan Weighted index rising 0.11 per cent to 35,457. (ANI)

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