Sensex Drops 388 Points, Nifty Slips Below 24,500 on Oil Price Rally

Indian benchmark indices ended lower on Tuesday as a sharp rise in crude oil prices amid geopolitical uncertainties weighed on investor sentiment. The decline came ahead of India’s July inflation data and US inflation figures, keeping investors cautious.

The 30-share BSE Sensex fell 388.19 points, or 0.49 per cent, to 78,154.25, while the NSE Nifty declined 112.10 points, or 0.46 per cent, to 24,471.70. The Sensex had fallen as much as 494.18 points during the session.

Among Sensex constituents, UltraTech Cement, Axis Bank, InterGlobe Aviation, Bharti Airtel, Bajaj Finance and Power Grid were major laggards. Eternal, Infosys, Titan, HCL Technologies and Tata Consultancy Services ended higher.

Brent crude jumped 2.18 per cent to USD 89.63 a barrel, renewing concerns about imported inflation and corporate input costs. Analysts said uncertainty over the Strait of Hormuz and US-Iran negotiations has kept energy markets volatile.

The rupee also remained under pressure, with the dollar trading around ₹95.4. USD/INR has risen from around ₹95.33 on August 3 to about ₹95.45 on August 11, indicating a modest weakening of the rupee over the past week. Higher crude prices can increase India’s import bill and add further pressure on the currency.

Markets have also given back part of their recent gains. From the August 3 close, when the Nifty stood at 24,774.30 and the Sensex at 78,639.03, the indices were down roughly 1.2 per cent and 0.6 per cent, respectively, by Tuesday’s close.

Inflation remains a key concern. Retail CPI inflation rose to 4.38 per cent in June from 3.93 per cent in May, moving above the RBI’s 4 per cent target. July CPI was scheduled for release on August 12, with economists expecting inflation around 4.5-4.6 per cent. A sustained crude rally could add further pressure through fuel, transport and other costs.

Despite Tuesday’s decline, FIIs bought equities worth ₹1,974.76 crore on Monday, providing some support to domestic markets.