Key indexes on Indian stock markets failed to maintain their intraday gains and closed Wednesday flat. Renewed tensions between the US and Iran undermined investor confidence.
The Bombay Stock Exchange's 30-share Sensex index rose as much as 694.25 points during the session, reaching 74,613.01. However, it gave back most of those gains by the close, finishing the day with a 64.42-point increase at 73,983.18.
The National Stock Exchange's 50-share Nifty index ended the day down 27.15 points at 23,214.95, fluctuating between 23,425.35 and 23,184.60 during the session.
Banking Stocks Lead Gains
Among Sensex components, Hindustan Unilever, Axis Bank, Kotak Mahindra Bank, ICICI Bank, ITC, and HDFC Bank were the strongest performers. Eternal Ltd., Tata Steel, Bajaj Finserv, and Titan were among the weakest stocks of the day.
The broader Asian market also showed weakness. South Korea's Kospi index fell 4.52%, Japan's Nikkei 225 dropped 1.89%. Shanghai Composite and Hong Kong's Hang Seng indexes also closed in negative territory.
European markets traded in negative territory during the session, while US markets mostly closed lower on Tuesday. Another factor limiting investor risk appetite was foreign institutional investor selling.
Official data showed foreign institutional investors sold shares worth 4,566.03 crore rupees on Tuesday. This outflow, combined with global uncertainty, increased pressure on Indian stocks.
Market commentary highlighted that investors were particularly focused on tensions in the Middle East, and the weak global outlook narrowed recovery opportunities. Brent crude oil also fell 0.20% to $91.27 per barrel.
The previous trading day painted a different picture. Sensex had risen 394.50 points and Nifty closed up 119.10 points on Tuesday.
Thus, Indian markets turned cautious again after the previous day's gains. The flat close after volatile intraday moves once again underscored the impact of geopolitical risks on stock markets.
