Markets trade lower amid geopolitical tensions, higher crude oil prices

Indian markets made negative start on Tuesday on the continued spike in crude oil prices that stoked global inflation and interest-rate concerns amid escalating geopolitical tensions in the Middle East after Iran ruled out talks with the U.S. to extend a 60-day ceasefire that expired Monday. Some cautiousness also came as rating agency ICRA estimated India's GDP growth at a four-quarter low of 7% in the April-June quarter of the current fiscal, sliding from 7.8% in the March quarter of FY26, on a slower pace of expansion in the services sector.

Both Sensex and Nifty were trading lower with cut of around quarter a percent in early deals amid foreign fund outflows. The provisional data showed that Foreign institutional investors (FIIs) sold shares worth Rs 2,535.10 crore on August 17. Continued selling pressure in IT and Teck stocks weighted on market sentiments.

On the global front, Asian markets were trading mostly lower tracking weakness on Wall Street overnight. China's economy lost momentum in July, with consumer spending, investment and industrial activity weakening. Retail sales grew 0.6% year-on-year, slowing from 1% growth in June.

The BSE Sensex is currently trading at 77448.01, down by 280.15 points or 0.36% after trading in a range of 77362.19 and 77575.21. There were 11 stocks advancing against 19 stocks declining on the index.

The top gaining sectoral indices on the BSE were Energy up by 0.54%, Auto up by 0.35%, Oil & Gas up by 0.34%, Healthcare up by 0.33% and Utilities up by 0.14%, while Realty down by 1.43%, TECK down by 1.31%, IT down by 1.17%, Telecom down by 0.54% and Bankex down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 0.64%, Reliance Industries up by 0.55%, Axis Bank up by 0.53%, Tata Steel up by 0.27% and Maruti Suzuki India up by 0.25%. On the flip side, Asian Paints down by 1.59%, Infosys down by 1.58%, Interglobe Aviation down by 1.49%, Bharti Airtel down by 1.47% and HCL Technologies down by 1.18% were the top losers.

Meanwhile, with a slower pace of expansion in the services sector, rating agency ICRA has estimated India’s Gross Domestic Product (GDP) growth at a four-quarter low of 7 per cent in the April-June (Q1) quarter of the current fiscal year (FY27), down from 7.8 per cent in the March quarter of FY26. It projected the industrial sector to grow at 7.7 per cent, agriculture at 4 per cent and the services sector at 7.9 per cent in the June quarter. 

The agency said high-frequency indicators across the industrial and services sectors showed a healthy picture of domestic volume growth in Q1FY27, despite concerns over the fallout from higher commodity prices during the quarter due to the West Asia conflict. It noted that business sentiment among services companies weakened materially in Q1FY27, with optimism declining to its lowest level in five years amid headwinds from the West Asia crisis and persistent wage-cost pressures.

Based on the assumption of an average crude oil price of $80-85 per barrel in FY27, ICRA expects real GDP growth to moderate to 6.7 per cent in FY27 from 7.7 per cent in FY26, with risks tilted to the downside amid continued tensions in West Asia and monsoon-related uncertainty. However, nominal GDP growth is projected to accelerate to a four-year high of 13 per cent in FY27 from 8.9 per cent in FY26, amid expectations of higher inflation readings.

The CNX Nifty is currently trading at 24228.50, down by 59.15 points or 0.24% after trading in a range of 24211.10 and 24269.65. There were 20 stocks advancing against 29 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Grasim Industries up by 1.00%, Bajaj Auto up by 0.83%, ONGC up by 0.78%, Coal India up by 0.73% and Axis Bank up by 0.71%. On the flip side, Infosys down by 1.79%, Bharti Airtel down by 1.74%, Wipro down by 1.43%, Asian Paints down by 1.37% and Tech Mahindra down by 1.36% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 1206.25 points or 1.74% to 68,014.00, Taiwan Weighted lost 446.79 points or 0.97% to 45,410.48, Hang Seng declined 182.23 points or 0.72% to 25,271.00, Straits Times fell 68.19 points or 1.18% to 5,700.27, KOSPI weakened 38.24 points or 0.55% to 6,939.70 and Shanghai Composite was down by 15.66 points or 0.39% to 3,966.99, while Jakarta Composite was up by 79.11 points or 1.24% to 6,481.00.