Mumbai (Maharashtra)

The equity markets witnessed renewed selling pressure on Thursday, with both benchmark indices closing in the red amid rising uncertainty in the ongoing Middle East conflict.

The Nifty 50 index closed at 23,775.10, declining by 222.25 points or 0.93 per cent, while the BSE Sensex ended at 76,631.65, falling by 931.25 points or 1.20 per cent.

Market experts attributed the decline to fading optimism around the ceasefire and renewed geopolitical tensions impacting investor sentiment.

Vinod Nair, Head of Research at Geojit Investments, said that the initial optimism following the ceasefire announcement weakened due to renewed US-Iran tensions and continued disruptions around the Strait of Hormuz.

"Ceasefire-led optimism faded as tensions pushed crude prices higher, reviving concerns around India's inflation. Profit booking, rising bond yields, and rupee weakness reduced near-term risk appetite," he said.

He added that financial stocks led the decline after the previous session's rally, while broader markets remained relatively stable. He also noted that global cues, including hawkish signals from the US Federal Reserve and rising oil prices, are impacting emerging market flows.

Meanwhile, concerns over potential ceasefire breaches and continued strikes in Lebanon further dampened investor confidence, keeping markets volatile.

Sectorally, a mixed trend was observed on the NSE. Indices such as IT, metal, pharma, and healthcare managed to close with gains, while pressure was seen in financial, auto, FMCG, media, PSU bank, and realty sectors, which ended in the red.

Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services, said that markets took a breather after the previous day's rally.

"Indian equities traded lower after yesterday's sharp rally, with profit booking seen as investors await further developments on the West Asia conflict. Sentiment is likely to remain cautious until clarity emerges on the ceasefire," he said.

He added that markets will remain highly sensitive to geopolitical developments, with a gradual uptrend possible once there is more clarity from ongoing negotiations.

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In the commodities market, Brent crude prices surged and were trading around USD 99 per barrel, moving closer to the USD 100 mark amid persistent tensions in West Asia.

Asian markets also reflected a weak trend, with most indices closing lower. Japan's Nikkei 225 declined by 0.46 per cent to 56,050, Singapore's Straits Times fell 0.38 per cent to 4,977, South Korea's KOSPI dropped 1.63 per cent to 5,778, and Hong Kong's Hang Seng index slipped 0.50 per cent to 25,764. Taiwan's weighted index was the only major market to close higher.