The SENSEX Index Closes 0.49% Lower

Indian stocks closed firmly lower on Tuesday, their lowest so far this month as the risk of a prolonged Middle East conflict deteriorated the Indian macroeconomic backdrop. The S&P/BSE Sensex fell 0.5% to 78,154 and the NSE Nifty 50 dropped 0.5% to 24,472. Crude oil and refined fuel prices extended their increase during the session after US President Trump hardened his stance on Iran and reiterated that the US can force a deal by waiting until Iran's economy worsens further. Higher oil prices raise costs for India's major import and magnify capital outflows to pressure the rupee, denting demand for domestic assets for foreign investors. Higher energy prices also pressure the RBI to tighten policy. Financial companies closed lower with InduSind Bank, Axis Bank, and Bajaj Finance dropping more than 1%. Energy dependent consumer goods companies also fell with Neste and Hindustan Unilever falling over 1%.

The SENSEX Index decreased 388 points or 0.49 percent on Tuesday to close at 78154 points. The decline was led by Nestle India (-2.32%), UltraTech Cement (-2.23%) and Indusind Bank (-1.79%). On the upside, the strongest performers were Tata Consultancy (0.68%), Infosys (0.65%) and HCL Tech (0.60%).

India’s BSE Sensex fell about 0.5% to 78,187 on Tuesday, reversing gains from the previous session as rising crude oil prices weighed on investor sentiment and heightened concerns over inflation and corporate earnings. Brent crude climbed to a one-week high of $87.7 per barrel amid renewed geopolitical tensions and fading hopes of a near-term US-Iran agreement, raising concerns for oil-importing India. Among individual stocks, BSE remained in focus after the National Stock Exchange said the exchange operator would replace Wipro in the benchmark Nifty 50 index from September 30. Meanwhile, Adani Group stocks may gain after a US judge dismissed the fraud and bribery case against Gautam Adani while criticizing the Justice Department’s decision to drop the charges. Notable laggards included Bharat Forge (-2.2%), Himadri (-1.5%), Bajaj Finance (-1.1%), BSE Ltd (-1.0%), and Vedanta (-1.0%).