Indian stock market indices opened significantly lower on Tuesday as escalating military and geopolitical conflict between the US and Iran intensified, with Nifty 50 declining 96.80 points to 24,114.20 and Sensex dropping 352.38 points to 77,264.02 in early trade. The selloff followed a weak overnight session on Wall Street, where the S&P 500 fell 0.8% and Nasdaq declined 1.6%. The trigger was President Donald Trump's reinstatement of a naval blockade on the Strait of Hormuz, with a proposed 20% levy on cargo transiting the waterway aboard non-Iranian ships. Brent crude traded near $84.72 per barrel after touching $85.64, adding to inflation and currency concerns for India. Tehran retaliated with further strikes on countries across the region, as reported by Dalal Street Investment Journal. The conflict has intensified with reports suggesting the US launched its third consecutive night of strikes on Iran, while ending a four-year truce, Houthi rebels fired missiles at Saudi Arabia after accusing it of bombing an airport under their control on Monday. Iranian strikes on two UAE-flagged tankers, Mombasa and Bahia, in the southern passage of the Strait of Hormuz in Omani territorial waters killed one Indian crew member and injured eight others, according to the UAE Ministry of Defense.
The broader market also edged lower, with Nifty Midcap 150 declining 0.37% and Nifty Smallcap 250 slipping 0.57%. According to Dalal Street Investment Journal, Nifty Bank and Nifty Financial Services indices were down around 1.2% during the morning session as heavyweight private banks came under selling pressure. Nifty Auto index was among the biggest sectoral laggards, falling around 1.6%, with rising crude oil prices raising concerns over higher fuel expenses and crude linked input costs for automobile companies. However, Nifty Pharma index gained around 0.8%, supported by strength in Biocon, while metal and FMCG stocks also traded in positive territory. Just Dial surged as much as 13% after its Q1FY27 revenue rose 9.9% to ₹327.5 crore, while net profit increased 4.1% to ₹166.2 crore, extending its post results rally for the second consecutive session. PDS jumped around 11% after securing a sourcing contract from the global procurement arm of a French headquartered supermarket group, and Biocon rose up to 6% following a large block deal linked to Mylan's proposed stake sale. HCLTech declined nearly 3% despite reporting a 20.3% rise in Q1 net profit, as brokerages remained cautious about its unchanged growth outlook and premium valuation.
Oil-related stocks traded lower by 2-3% on Tuesday, tracking the surge in crude oil prices amid escalating geopolitical tensions. Brent crude oil prices surged nearly 14% to a high of $85.66 per barrel since commodity markets re-opened this week, starting Monday, July 13. Oil marketing companies (OMCs) such as Indian Oil Corporation, Bharat Petroleum Corporation Limited, and Hindustan Petroleum Corporation Limited declined 2% each, with BPCL falling to an intraday low of ₹302.05, HPCL at ₹383.30, and IOCL at ₹137.33 on the NSE. In the aviation space, InterGlobe Aviation (IndiGo) declined over 3% to an intraday low of ₹5,064.50, while SpiceJet shares slipped 1.5% to ₹10.96. Among paint stocks, Asian Paints fell 3% to ₹2,579.90, Berger Paints India dropped 2% to ₹484.35, with Kansai Nerolac Paints trading 1.3% lower at ₹199.57 and Indigo Paints declining 3% to ₹1,020.20. Tyre stocks were also under pressure, with CEAT declining 3% to an intraday low of ₹3,761, while MRF slipped 1% to ₹1,30,115 and Balkrishna Industries fell 1.3% to ₹2,187.
Foreign Portfolio Investors (FPIs) sold Indian equities worth ₹3,062.27 crore in the previous session on July 13, while Domestic Institutional Investors provided partial support by purchasing shares worth ₹2,171.70 crore, as reported by Dalal Street Investment Journal. The recent buying has come on the back of improving macro picture following a 40% crash in crude oil prices from their year-to-date highs and concerns around concentration risk in South Korean and Taiwanese markets. Despite this encouraging trend, FPI selling remains at its highest level in a calendar year at ₹255,958 crore, as reported by The Hindu. The fresh spike in oil prices threatens to derail this FPI comeback, with Brent crude futures surging to a one-month high of $85 per barrel after renewed hostilities effectively unwound the de-escalation priced in after last month's interim US-Iran understanding. If crude moves up to $90 and stays there, or rises even further, the vulnerability arising from India's energy imports and the balance of payments deficit will resurface, according to V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.
The Nifty 50 index is expected to remain in a 24,000-24,300 consolidation band, according to Dhupesh Dhameja, derivatives research analyst at SAMCO Securities. As reported by Dalal Street Investment Journal, for the remainder of the session, the Nifty's 24,000 level remains an important support zone, while 24,250 to 24,300 could act as resistance. The broader market also edged lower, with Nifty Smallcap 250 falling almost 1% and Nifty Midcap 150 dropping about 0.63%. Nifty Realty fell the most, down over 1.8%, followed by Defence, PSU Bank, and Auto sectors, while Nifty Metal rose by 1.07%, offering some relief amid the broader selloff. IT and NBFC stocks led the losses, with HCL Technologies falling the most at 3.11% to ₹1,183.20, despite the broader IT sector recovering last session on better-than-expected Q1 results. The overall market breadth remained bearish, with NSE seeing 1,608 declines and 780 advances, while 139 stocks remained unchanged. Traders will track weekly expiry volatility, crude oil movements, US inflation data and ongoing Q1 earnings announcements for future market direction.
