Benchmark equity indices BSE Sensex and NSE Nifty ended lower on Tuesday as rising crude oil prices and continued foreign fund outflows weakened investor sentiment. According to The Times of India, the 30-share BSE Sensex fell 416.72 points, or 0.54 per cent, to settle at 76,886.91. During the session, it dropped as much as 562.57 points, or 0.72 per cent, to 76,741.06. The NSE Nifty declined 97 points, or 0.40 per cent, to close at 23,995.70, ending just below the key 24,000 mark. Despite the broader market decline, Nifty Smallcap and Midcap indices showed resilience, rising up to 0.4% to close in the green, as per The Economic Times.
The primary driver of Tuesday's market decline was heavy profit booking in major banking stocks, including ICICI Bank, HDFC Bank, Axis Bank, and State Bank of India. Banking indices came under significant pressure during the session, with the PSU Bank index dropping over 2% to emerge as the top loser, while the Private Bank index also declined. The broader Bank Nifty index ended with notable losses, reflecting weakness across the financial sector. Heavyweight banking stocks, which have a strong influence on benchmark indices, played a key role in pulling the markets lower, as reported by The Economic Times.
ONGC emerged as the top Nifty50 gainer with a 5.39% surge, followed by Adani Enterprises at 3.91% and Coal India at 3.21%. Other notable gainers included Reliance Industries (1.70%), Nestle India (1.61%), Dr. Reddy's (1.51%), and Bharti Airtel (1.31%). On the losing side, Maruti Suzuki topped the losers list with a 2.66% decline, followed by HCL Tech (2.63%) and InterGlobe (2.61%). Maruti Suzuki's decline was attributed to the company reporting a 7% year-on-year decline in its standalone net profit for Q4 FY26, as per The Economic Times.
Brent crude futures were trading around 3% higher at around $111 per barrel on Tuesday afternoon, according to The Economic Times. After comfortably falling below the $100 per barrel mark earlier this month, oil prices soared back above the crucial level last week as fresh attacks near the Strait of Hormuz spooked investors about supply concerns. The sharp rise in crude oil prices above USD 110, continued disruption in the Strait of Hormuz, rupee depreciation beyond 94.5 and sustained FII outflows underscore mounting macroeconomic pressures on Indian markets. Ponmudi R, CEO of Enrich Money, noted that "Indian equity markets traded under pressure, ending in the red as unresolved tensions in the Middle East and persistent disruptions to energy supply, particularly the continued closure of the Strait of Hormuz, weighed on investor sentiment."
Foreign Institutional Investors (FIIs) sold equities worth ₹1,151.48 crore on Monday, as per exchange data reported by The Times of India. This continued outflow pattern has been a key factor in weakening market sentiment and contributing to the overall decline in benchmark indices. The Indian rupee also weakened, closing at 94.56 against the US dollar, adding to market concerns over external vulnerabilities. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, explained that "India underperformed hugely in 2025 and this trend is continuing in 2026, too. S&P 500 set new records this year. Kospi is up 55% YTD, and Taiex is up 35% YTD while Nifty is down 7.8% YTD. The principal reason behind this underperformance is the booming AI trade, which began in 2025 and is continuing this year."
Around 1,784 stocks declined while 1,490 advanced and 105 remained unchanged on NSE, as per The Economic Times. The India VIX, which measures volatility in the market, dropped around 2% to 18.05, indicating some stabilization in market sentiment despite the broader decline. Despite the weakness in frontline indices, the Nifty Midcap 100 and Smallcap 100 indices ended higher, rising 0.28% and 0.42% respectively. This divergence suggests selective buying interest in smaller stocks even as large-cap sentiment remained cautious. Sectorally, the Nifty PSU Bank index declined more than 2% to emerge as the top loser, while Nifty Oil & Gas gained more than 1%. Bajaj Broking noted that "Overall, markets are entering a consolidation phase, balancing strong earnings momentum against macro and geopolitical uncertainties, with near-term direction hinging on central bank commentary and incoming data."
