Crude oil surges; Sensex and Nifty witness a sharp decline

Mumbai: Domestic equity benchmarks saw a decline in early trade on Tuesday. Investor sentiment was dampened as crude oil prices crossed $91 per barrel and hopes for a US-Iran peace deal faded, impacting the market.
In morning trade, the Sensex fell 365 points, or 0.47%, to 77,362, touching the day’s low. Meanwhile, the Nifty traded at 24,211, down 76 points or 0.31%.
Sector-wise, Nifty IT was the top loser, dropping over 1%. Nifty Mid-Small IT and Telecom fell 0.62%, while Nifty Realty declined 0.4%.
Similarly, the Financial Services, Private Bank, Media, Metal, and FMCG indices also saw slight declines. On the other hand, Nifty Auto rose 0.40% and PSU Bank gained 0.29%.
Prior to the market opening, analysts noted that rising Brent crude prices and the increase in US 10-year Treasury yields could impact equities in the near term.
They pointed out that the US 10-year bond yield has risen to 4.73%, which could be negative for investment flows from Foreign Institutional Investors (FIIs).
However, analysts also stated that the strength of the Indian economy and signs of improving earnings could provide support to domestic equities.
They added that Domestic Institutional Investors (DIIs), who hold significant funds, might buy during sharp market dips, while retail investors could capitalize on the decline to accumulate quality stocks for the long term. Nevertheless, market volatility is likely to persist due to geopolitical tensions. A sell-off in the market was triggered by reports that Iran had signaled a more aggressive stance and US President Donald Trump had refused to advance a ceasefire agreement, raising concerns about potential disruptions to energy supplies.
Following this, the international oil benchmark Brent crude rose 0.60% from its previous close to surpass $91 per barrel, while US West Texas Intermediate (WTI) crude also climbed more than 1% to reach $85.37 per barrel.