Sensex falls 238 points, Nifty closes below 24,200 despite Iran-US mediation efforts

The Indian stock market extended losses on Tuesday, with Sensex and Nifty dropping up to 0.3% despite a fall in oil prices following reports of mediation efforts between the US and Iran.

Sensex dropped nearly 238 points to end the session at 77,470, while Nifty 50 dropped around 51 points to close at 24,188 on Tuesday. Broader markets, however, edged higher, with Nifty Midcap 100 and Nifty Smallcap 100 rising up to 0.6% to close in the green.

HDFC Bank, State Bank of India (SBI), Reliance Industries (RIL), Infosys, Tata Consultancy Services (TCS) and Zudio-parent Trent shares were the top losers on Sensex, falling 1-2%. Bucking the trend, Bajaj Finserv, HCL Tech, UltraTech Cement, Mahindra & Mahindra and Titan shares gained up to 2% to lead gains on the benchmark index.


Sectorally, Nifty IT and Nifty PSU Bank indices declined nearly 1% each, while those of Nifty Realty and Nifty Auto rose more than 1% each to lead gains. The overall market breadth was however slightly positive, with NSE seeing 1,805 advances and 1,503 declines, while 127 stocks remained unchanged.

Iran-US mediation efforts
Iran had received a proposal from mediators for a 10-day ceasefire in efforts to salvage an interim deal signed on June 17, a senior Iranian official told Reuters. This intended to pave the way for a lasting agreement to end the raging conflict that began on February 28 with US-Israeli attacks on Iran that killed the latter’s former supreme leader.

Notably, while mediation efforts are boosting market sentiment, caution is still warranted. Yemen's Iran-aligned Houthis on Monday said that they would impose a naval blockade on Saudi Arabia, opening a potential new front against the US in its war with Iran and raising the threat to global energy supplies and trade beyond the Gulf.

Oil prices dipped below $90 per barrel after the reported mediation efforts. Brent crude futures were trading near $88 per barrel, while WTI Crude futures were at $82 per barrel.

What lies ahead?
Despite geopolitical challenges, midcaps are performing well in anticipation of strong corporate earnings, supported by demand-led business updates, Vinod Nair, Head of Research at Geojit Investments, highlighted. He noted that while this segment’s elevated valuations compared to large caps warrant caution, underlying business conditions are expected to remain healthy at least through H1FY27.

“However, sustaining this momentum will require the ongoing spike in input costs to normalize as demand growth may tend to become flattish in H2FY27. At present, the broader market is trading in a mixed range, reflecting large caps' underperformance driven by moderating inflows amid rising geopolitical risks and higher crude oil prices,” according to the analyst.

Technical view on Nifty


Nifty on the weekly expiry session traded in a range with corrective bias and closed around the 24,200 levels, Bajaj Broking Research noted. The index has formed a high wave candle with small real body and shadows in either direction signaling consolidation for the second session amid stock specific action.

Going ahead, index is expected to extend the recent consolidation and trade in the broad range of 23,800-24,350 in the coming sessions. Within the consolidation, the brokerage sees 24,000-24,100 as the immediate support. “We expect the index to hold above the same and head towards the upper band of the range and last week high placed at 24,370 levels,” it added.

“On the higher side, only a breakout above 24,370 will open further upside towards the April high of 24,600. Short term support is placed at 24,000-23,800 levels, being the confluence of the almost identical low of the last 5 weeks and 50 days EMA. Index holding above the support area will keep the overall bias positive,” Bajaj Broking Research said.

(With inputs from agencies)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)