Markets trade under pressure amid higher crude prices, global tensions

Indian equity benchmarks extended their previous session’s losses with negative start on Tuesday amid rising crude oil prices, widening conflict in the Middle East, and growing concerns over a possible US Federal Reserve rate hike. Oil prices rose as Iran threatened that any new attacks on Tehran will be met with a retaliation on U.S. assets, warning that energy infrastructure across the Gulf, including U.S. oil and gas interests, was vulnerable.

Both Sensex and Nifty were trading in red amid weakness in real estate, Auto, Consumer Durables and Consumer Discretionary counters. Traders also remained on sidelines ahead of Nifty weekly expiry of F&O contracts. However, defence shares such as Bharat Electronics traded higher after defence ministry approved acquisition of military hardware for the three services including radars, advanced light helicopters and mechanical mine layers at an estimated cost of Rs 1.10 lakh crore to boost the military's overall combat prowess.

On the global front, Asian markets were trading on a mixed as gains in technology shares supported, while ongoing US-Iran tension weighed on risk sentiment.

The BSE Sensex is currently trading at 75732.01, down by 400.80 points or 0.53% after trading in a range of 75714.61 and 76012.11. There were 4 stocks advancing against 26 stocks declining on the index.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.84%, Metal up by 0.35%, Industrials up by 0.28%, Telecom up by 0.17% and Basic Materials up by 0.17%, while Realty down by 1.17%, Auto down by 0.67%, Consumer Durables down by 0.64%, Consumer Discretionary down by 0.46% and Utilities down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were Bharat Electronics up by 1.16%, Eternal up by 0.23%, Adani Ports & SEZ up by 0.21% and Bajaj Finserv up by 0.07%. On the flip side, Trent down by 1.28%, Mahindra & Mahindra down by 1.26%, Sun Pharma down by 1.11%, Axis Bank down by 0.87% and TCS down by 0.87% were the top losers.

Meanwhile, reflecting India’s strong economic growth and rising optimism across industries, the Confederation of Indian Industry’s (CII) Business Confidence Index (BCI) rose to 66.0 in the second quarter of fiscal year 2026-27 (Q2FY27), its highest level in recent quarters, from 60.8 in the preceding quarter. The sharp increase signals a broad-based improvement in business expectations and indicates that India Inc remains optimistic about the economic outlook for Q2FY27, as disruptions arising from the West Asia crisis gradually ease and economic momentum is expected to remain sustained.

Chandrajit Banerjee, Director General, CII, said, “The optimism shown by businesses, as reflected in the BCI, is a clear testament to the inherent resilience of the Indian economy even as geopolitical uncertainty continues. The steady improvement in business activity, backed by robust domestic demand and stable macroeconomic indicators, reinforces the perception that the government’s facilitative policies will support a faster expansion in output and new orders, creating fresh opportunities for firms in India and abroad.”

The findings are based on the 136th Round of CII’s Quarterly Business Outlook Survey, which received responses from more than 240 companies across sectors, regions and firm sizes. The survey findings come at an important juncture for the economy. The latest estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) showed that India’s real GDP grew by 7.8 per cent in the first quarter of the current fiscal year, compared with 6.9 per cent in the corresponding quarter of the previous fiscal year. The survey results reinforce that the better-than-expected GDP growth is not merely statistical but reflects a genuine improvement in on-ground economic activity. The manufacturing sector grew by 9.2 per cent in Q1FY27, while the services sector expanded by 10 per cent during the corresponding period.

Besides, both components of the BCI - the Current Situation Index (CSI) and the Expectations Index (EI) - improved during the quarter. However, the increase was led primarily by a sharp rise in the Expectations Index, highlighting growing confidence about future business prospects. The EI climbed to 67.7 in Q2FY27 from 60.6 in Q1FY27, significantly outpacing the CSI, which rose more moderately to 62.6 from 61.2. The widening gap between the two indices underlines industry’s expectation that business conditions in the coming quarter will be appreciably stronger than those prevailing currently. It also indicates that firms are looking beyond near-term challenges and anticipating a more favourable operating environment.

The CNX Nifty is currently trading at 23674.35, down by 104.80 points or 0.44% after trading in a range of 23668.15 and 23758.95. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Bharat Electronics up by 1.82%, HDFC Life Insurance up by 1.66%, Hindalco Industries up by 0.97%, Eternal up by 0.45% and Coal India up by 0.45%. On the flip side, Shriram Finance down by 1.39%, Trent down by 1.33%, Mahindra & Mahindra down by 1.18%, Bharti Airtel down by 1.02% and ICICI Bank down by 0.95% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 180.16 points or 0.27% to 66,580.00, KOSPI increased 164.11 points or 2.29% to 7,159.50, Jakarta Composite gained 54.37 points or 0.81% to 6,674.04 and Shanghai Composite strengthened 14.29 points or 0.36% to 3,946.99. On the other hand, Hang Seng declined 97.12 points or 0.38% to 25,316.00, Straits Times fell 25.41 points or 0.44% to 5,766.87 and Taiwan Weighted was down by 16.58 points or 0.04% to 47,309.69.