Stock markets close lower in volatile trade as escalating US-Iran tensions, FII outflow dent sentiment

Mumbai: Benchmark stock indices Sensex and Nifty closed lower in a volatile trade on Thursday, as investors remained cautious amid rising tensions between the US and Iran.

The 30-share BSE Sensex declined 150.63 points, or 0.20 percent, to settle at 73,832.55. During the day, the benchmark hit a high of 74,394.34 and a low of 73,518.75, gyrating 875.59 points.

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The 50-share NSE Nifty edged lower by 53.35 points, or 0.23 percent, to settle at 23,161.60, closing down for the second consecutive day. Intraday, the benchmark index hit a high of 23,327.45 and a low of 23,072.05.

Unabated foreign fund outflows and a spike in US inflation also led to muted market trading, according to analysts. US consumer inflation hit a three-year high of 4.2 percent in May due to high energy prices amid the West Asia crisis.

Among the Sensex firms, Infosys, HCL Tech, Adani Ports, Bajaj Finance, Eternal and Bharat Electronics were the biggest laggards.

Mahindra & Mahindra, ICICI Bank, Kotak Mahindra Bank and Sun Pharma were among the winners

"Indian equities witnessed another highly volatile session today, with benchmark indices staging a strong recovery from opening losses before surrendering gains in the second half of the day," Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.

Brent crude, the global oil benchmark, traded one per cent lower at USD 92.16 per barrel.

Foreign Institutional Investors (FIIs) offloaded Indian equities worth Rs 2,124.98 crore on Wednesday, according to exchange data.

"After a subdued start, the Nifty witnessed a swift rebound in the first half; however, the recovery completely fizzled out as the session progressed. Investor sentiment remained fragile amid renewed escalation in the Middle East following fresh developments involving the US and Iran, which pushed crude oil prices closer to the USD 95 per barrel mark.

"Adding to the pressure, stronger-than-expected US inflation data raised concerns that interest rates may remain elevated for longer, resulting in weakness across global equity markets. Persistent foreign institutional outflows and a weaker rupee further weighed on sentiment," Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

The BSE MidCap Select index dropped 1.08 percent and SmallCap Select index declined 0.20 percent.

Sectorally, IT tanked 1.78 percent, followed by Focused IT (1.59 percent), Industrials (1.40 percent), Capital Goods (1.19 percent), Utilities (1.17 percent) and Power (1.07 percent).

Healthcare, Private Banks index, Bankex, Top 10 Banks and MidSmall Private Banks Quality Tilt ended higher.

A total of 2,807 stocks declined, while 1,384 advanced and 198 remained unchanged on the BSE.

In Asian markets, South Korea's Kospi and Japan's Nikkei 225 ended marginally higher, while Shanghai's SSE Composite index and Hong Kong's Hang Seng settled lower. Markets in Europe were trading higher.

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US markets ended significantly lower on Wednesday.

"IT stocks lagged amid concerns that stronger US inflation could delay interest rate cuts and keep global financial conditions tight," Vinod Nair, Head of Research, Geojit Investments Limited, said.

On Wednesday, the Sensex trimmed most of its intraday gains during the fag-end of trading and settled 64.42 points, or 0.09 percent, higher at 73,983.18. The Nifty, however, dipped 27.15 points, or 0.12 percent, to end at 23,214.95.

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