Key gauges end lower as Middle East peace hopes fade

Indian equity benchmarks ended lower on Tuesday, extending their losing streak, as elevated crude oil prices and fading hopes of a diplomatic breakthrough in the Middle East weighed on investor sentiment. Brent crude climbed above $90 a barrel, while rising US Treasury yields added to concerns over global inflation and foreign fund flows. 

Both the Sensex and Nifty were ended over half percent lower, pressured by selling in IT, TECK and Realty stocks. Market sentiment was further weighed down by exchange data showing that Foreign Institutional Investors (FIIs) sold equities worth Rs 2,535.10 crore on a net basis on Monday. 

Some of the important factors in trade: 

Ind-Ra projects India's GDP growth to slow down to 6.8% in FY27: Citing risks from fuel and food inflation stemming from West Asia conflict's uncertainty, weak currency, and the likely impact of El Nino on agriculture, India Ratings & Research (Ind-Ra) has projected India's GDP growth to slow down to 6.8 per cent in FY27, as against 7.6 per cent in the previous year.

India’s unemployment rate falls to four-month low of 5.1% in July: Periodic Labour Force Survey (PLFS) has showed that India's unemployment rate (UR) for persons aged 15 years and above fell to a four-month low of 5.1 per cent in July 2026, from 5.5 per cent in June 2026. 

Government approves 31 new ECMS projects: The government of India has approved 31 new proposals under the Electronics Component Manufacturing Scheme (ECMS), involving investments worth Rs 7,877 crore. With these approvals, the total number of projects cleared across five tranches has reached 106, with cumulative investments exceeding Rs 69,000 crore. 

India accelerates defence self-reliance with sixth positive indigenisation list: India has further strengthened its defence indigenisation drive with the notification of the sixth Positive Indigenisation List (PIL), comprising 405 strategically important items and offering an estimated business opportunity of Rs 3,070 crore. 

Global front: European markets were trading mostly in red, while Asian markets ended mixed as elevated oil prices and rising bond yields amid fading hopes for a deal to end the Iran-U.S. war stoked inflation concerns. 

Finally, the BSE Sensex fell 492.70 points or 0.63% to 77,235.46 and the CNX Nifty was down by 132.75 points or 0.55% to 24,154.90. 

The BSE Sensex touched high and low of 77,575.21 and 77,234.36, respectively. There were 8 stocks advancing against 22 stocks declining on the index.

The top gaining sectoral indices on the BSE were Healthcare up by 0.25%, Auto up by 0.15%, Industrials up by 0.08% and Energy up by 0.03%, while IT down by 1.66%, TECK down by 1.60%, Realty down by 1.28%, Consumer Durables down by 0.81% and FMCG down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 0.89%, Power Grid Corporation up by 0.66%, Mahindra & Mahindra up by 0.47%, Bajaj Finance up by 0.27% and Larsen & Toubro up by 0.15%. On the flip side, Asian Paints down by 2.40%, Infosys down by 2.02%, HCL Technologies down by 1.93%, Bharti Airtel down by 1.75% and TCS down by 1.47% 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.

CNX Nifty touched high and low of 24,269.65 and 24,154.90, respectively. There were 10 stocks advancing against 40 stocks declining on the index. 

The top gainers on Nifty were Axis Bank up by 1.28%, Max Healthcare up by 1.07%, Mahindra & Mahindra up by 0.92%, Grasim Industries up by 0.87% and Power Grid Corporation up by 0.70%. On the flip side, Tata Motors Passenger down by 2.24%, Asian Paints down by 2.20%, Infosys down by 2.18%, Wipro down by 2.11% and HCL Technologies down by 2.04% were the top losers. 

European markets were trading mostly in red; France’s CAC fell 37.4 points or 0.44% to 8,542.20 and Germany’s DAX lost 72.21 points or 0.27% to 26,266.40, while UK’s FTSE 100 increased 2.22 points or 0.02% to 10,722.52.

Asian markets ended mixed on Tuesday as Brent crude climbed above $91 a barrel after US President Donald Trump said that he was not interested in extending the interim peace deal with Iran, while rising US Treasury yields also kept traders cautious. Japanese shares dropped as Japan’s 10-year government bond yield climbed to a three-decade high as a stalemate in the Middle East conflict stoked inflation worries and reinforced speculation about ‌a near-term Bank of Japan interest-rate increase. South Korea’s Kospi fell due to profit-taking after a sharp semiconductor rally, while ongoing US-Korea trade negotiations over the planned $200 billion investment commitment created uncertainty for Korean exporters. Meanwhile, Chinese shares gained as investors remained optimistic that a string of weaker-than-expected economic data would force Beijing to roll out aggressive new monetary and fiscal stimulus measures.