Sensex, Nifty end in red as crude oil tops $111; markets decline for 3rd day

Stock markets extended their decline for a third consecutive session on Thursday as escalating tensions in the Middle East pushed crude oil prices higher, fuelling inflation concerns and weighing on investor sentiment.Selling across information technology, FMCG, energy and other heavyweight stocks dragged the benchmarks lower, while mid- and small-cap shares continued to underperform.The BSE Sensex closed at 73,249.39, down 460.30 points or 0.62%. The NSE Nifty 50 fell 123.70 points, or 0.54%, to settle at 22,687.65.The decline came as Brent crude climbed above $111 a barrel amid concerns over further escalation in the Middle East and potential disruptions to oil supplies. For India, which imports most of its crude oil requirements, higher prices raise concerns about imported inflation, the rupee and corporate profit margins. CRUDE OIL ABOVE $110 ADDS TO INFLATION WORRIESCrude oil prices remained a key headwind for Indian equities. Brent crude rose 2.74% to $111.80 a barrel in the latest supplied snapshot, while US West Texas Intermediate crude gained 2.33% to $99.41.The rise came amid escalating tensions in the Middle East, with further Houthi attacks in Saudi Arabia intensifying concerns about a wider conflict and possible supply disruptions. The developments also prompted the US to order some diplomats and family members to leave its missions in the kingdom. Higher oil prices are a concern for India because they can increase the country's import bill, put pressure on the rupee and add to inflation. They can also raise input and transportation costs for businesses, potentially squeezing corporate earnings.Persistent pressure from crude prices could further complicate the interest-rate outlook, as policymakers weigh inflation risks against the need to support economic growth.IT, FMCG AND ENERGY STOCKS DRAGThirteen of the 16 major sectoral indices ended lower, with IT, FMCG and energy among the biggest percentage-wise laggards, according to the supplied market report.The Nifty IT index fell 1.05%, while the Nifty FMCG index declined 1.41%. The Nifty Oil & Gas index dropped 0.86%, and the Nifty Media index lost 2.35%.Among heavyweight stocks, Reliance Industries fell 2.59%, adding to the pressure on the benchmarks. HDFC Bank declined 1.85%, while Infosys dropped 1.40% and TCS lost 0.95%.Other notable losers included Power Grid, which fell 1.71%, Trent, down 1.56%, and Bharat Electronics, which declined 1.24%.There were some pockets of resilience. Bajaj Finance gained 1.61%, UltraTech Cement rose 1.52% and ICICI Bank advanced 0.71%. However, gains in select stocks were not enough to offset the broader selling pressure.MID- AND SMALL-CAP STOCKS UNDERPERFORMThe weakness extended beyond the benchmark indices, with broader-market stocks facing heavier selling.The Nifty 100 fell 0.52%, the Nifty 200 declined 0.59% and the Nifty 500 dropped 0.65%. The Nifty Midcap 50 slipped 0.54%, while the Nifty Midcap 100 fell 0.87%. The Nifty Smallcap 100 declined 1.14%.The broader weakness suggests investors remained cautious about taking risks beyond large-cap stocks. India VIX, a gauge of expected market volatility, rose 0.90% to 15.82.Ajit Mishra, SVP – Research at Religare Broking, said markets remained under pressure for a third consecutive session amid elevated crude oil prices and escalating geopolitical tensions.He said the benchmarks witnessed volatile trading, with intermittent buying from lower levels offering only limited relief. Selling remained broad-based, with FMCG, IT and energy among the major laggards, while mid- and small-cap indices continued to underperform.Mishra added that global and domestic macroeconomic concerns were weighing on sentiment. Brent crude had moved towards $113 a barrel amid Middle East tensions, raising concerns over imported inflation and corporate margins. Uncertainty around the interest-rate outlook, mixed global cues and persistent foreign fund outflows were also dampening risk appetite.On the technical outlook, Mishra said the Nifty's sustained weakness had further undermined the near-term outlook. He identified the 22,200–22,400 zone as a key support area, with 22,900 likely to act as immediate resistance. A sustained move above that level would be needed to improve market sentiment and signal a meaningful recovery.Given elevated crude prices, geopolitical uncertainty and weakness in broader-market participation, he advised investors to remain cautious, focus on selective stock-specific opportunities and maintain disciplined risk management.Investors will track developments in the Middle East, crude oil prices, global bond yields, foreign fund flows and the next set of corporate earnings for direction.The immediate concern is whether crude oil prices remain elevated and continue to fuel inflation worries. A sustained rise could put further pressure on the rupee and corporate margins, while any easing in geopolitical tensions and oil prices could help stabilise sentiment.For now, the third consecutive session of losses and the underperformance of mid- and small-cap stocks point to a cautious market. Investors will look for signs of easing external pressure and stronger participation in any recovery before sentiment improves meaningfully.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends