The Indian stock market ended significantly lower on Tuesday, 11 August, amid profit-booking amid rising oil prices and persistent uncertainty over the reopening of the Strait of Hormuz and a potential US-Iran deal.
The Sensex fell 388 points, or 0.49%, to end at 78,154.25, while the Nifty 50 settled 112 points, or 0.46%, lower at 24,471.70.
Nifty Midcap 100 index slipped 0.02%, while the Smallcap 100 index bucked the trend, rising 0.22%.
In terms of index contribution, Bharti Airtel, Axis Bank, and HDFC Bank were the top drags on the Sensex index.
The Sensex and the Nifty 50 declined amid profit-booking as crude oil prices jumped over 2% to trade near $90 per barrel, reviving inflation fears and prompting interest rate hikes.
"A sharp rebound in crude prices shifted market attention back to inflation risks, tempering investor enthusiasm despite a supportive earnings backdrop. Concerns over the disruptions in the Strait of Hormuz and the U.S.-Iran negotiations kept sentiment guarded, particularly ahead of key inflation prints in India and the U.S," said Vinod Nair, Head of Research, Geojit Investments Limited.
"The resulting risk-off sentiment weighed on sectors most vulnerable to higher energy costs, while pharma and select IT names emerged as relative gainers. Nevertheless, robust foreign inflows and encouraging corporate earnings are limiting the downside risk," said Nair.
Dr Reddy's Labs, Eternal, TCS, Titan, and Infosys were the top gainers in the Nifty 50 index.
On the other hand, Tata Consumer, Max Healthcare Institute, Nestle India, UltraTech Cement, and Apollo Hospitals Enterprise were the top laggards in the index.
Nifty FMCG dropped 1.17%, while the Realty and Metal indices declined almost 1% each. Bank Nifty and Financial Services indices dropped 0.42% and 0.43%, respectively.
On the other hand, Nifty Pharma and IT climbed 1% and 0.61%, respectively.
According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, a reasonable negative candle formed on the daily chart, signalling a lacklustre movement in the market over the last six sessions.
"This gradual weakness with range-bound action signals a chance of some more dip down to the crucial breakout area of 24,300 before bouncing back from the lows," said Shetti.
"The larger degree bullish pattern, like higher tops and bottoms, is intact as per the daily and weekly timeframe charts, and the present weakness could be in line with the formation of a new higher bottom of the sequence. But the higher bottom reversal needs confirmation. The consolidation/choppy movement is likely to continue for the short term. The next lower support to be watched around 24,300," said Shetti.
Sudeep Shah, the head of technical and derivatives research at SBI Securities, said the 200-day EMA zone of 24,390-24,350 will be a key support area for the Nifty. A decisive break below the 24,350 could accelerate the correction and drag the index towards 24,200 in the near term.