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Markets closed marginally lower on Wednesday, with benchmark indices extending their decline for the second consecutive session as escalating tensions in West Asia and rising crude oil prices dampened investor sentiment ahead of the Federal Reserve’s policy meeting later in the day.
The Sensex settled 138.64 points or 0.17 per cent lower at 81,444.66, while the Nifty 50 ended 41.35 points or 0.17 per cent down at 24,812.05.
The Nifty opened flat at 24,788.35 but found strong buying interest near the 24,800 zone, triggering a sharp rebound that propelled the index to an intraday high of 24,947 within the opening hour.
However, the upside momentum failed to sustain, and profit booking at higher levels dragged the index to an intraday low of 24,750 during the final hour.
“The domestic market failed to maintain the opening gains as the continuing tensions in West Asia and volatility in oil prices dragged the overall sentiment,” said Vinod Nair, Head of Research, Geojit Investments Limited.
Demand revival
“However, auto and consumer discretionary gained in expectations of a demand revival.”
Market breadth remained weak with 2,448 stocks declining against 1,532 advances on the BSE, while 135 stocks remained unchanged. A total of 4,115 stocks were traded during the session. Seventy-five stocks hit their 52-week highs, while 61 touched their 52-week lows.
Sectoral performance was mixed, with banking, consumer durables and auto stocks ending with marginal gains. The Nifty Bank index bucked the trend to close 114.60 points or 0.21 per cent higher at 55,828.75.
However, all other major sectoral indices ended in the red, with IT stocks leading the decline. The Nifty IT index underperformed significantly, shedding 0.83 per cent, while metals and FMCG witnessed notable weakness, declining 0.72 per cent and 0.47 per cent, respectively.
“Markets traded lacklustre and ended marginally in the red, extending the ongoing consolidation phase,” said Ajit Mishra, SVP Research at Religare Broking Ltd.
“After a flat start, the Nifty edged higher initially but failed to sustain the momentum, primarily due to pressure from heavyweight stocks.”
Broader market sentiment remained under pressure, with the Nifty Midcap 100 and Nifty Small cap 100 indices slipping 0.46 per cent and 0.23 per cent, respectively, reflecting a corrective undertone.
The Nifty Next 50 declined 207.75 points or 0.31 per cent to close at 66,788.70, while the Nifty Financial Services index fell 51.70 points or 0.20 per cent to end at 26,399.95.
Notable loser
Among individual stocks, Hindustan Zinc was a notable loser, slipping 6 per cent following a significant trade. Auto and consumer durables stocks held firm on demand revival expectations, while IT, oil & gas, and metals stocks dragged down overall sentiment.
The Indian rupee traded weak during the session, declining 0.24 rupees to close at 86.42 against the US dollar.
“Rupee traded weak by 0.24 rupees at 86.42 as rising crude prices and a cautious FII stance amid ongoing Middle East geopolitical tensions weighed on sentiment,” said Jateen Trivedi, VP Research Analyst — Commodity and Currency at LKP Securities.
In the commodities space, gold prices traded in a narrow range as investors awaited the US Federal Reserve’s policy decision. “MCX Gold remained within the band of ₹99,150 to ₹99,750, while Comex gold hovered around $3,375,” Trivedi noted. “Market participants are closely watching three key macro triggers: The US Fed’s interest rate decision, geopolitical tensions between Iran and Israel, and progress in global trade negotiations.”
Technical analysts remain cautious about the near-term outlook.
Global sentiment
“The index remained volatile throughout the day as updates related to the Israel-Iran conflict and the possibility of US kinetic intervention weighed on global sentiment,” said Rupak De, Senior Technical Analyst at LKP Securities. “On the technical front, Nifty closed below the crucial support level of 24,850.”
“D-Street opened on a cautious note and couldn’t hold onto gains, as bears took charge in the second half,” observed Vikram Kasat, Head — Advisory at PL Capital.
“Early momentum from auto and financial stocks gave bulls a brief run, but weak global cues and oil worries tilted the scales.”
Escalating tensions in West Asia have driven Brent crude prices higher, posing a macro headwind for India due to its high dependency on crude imports, thereby creating risks to corporate earnings projections. The geopolitical uncertainty, coupled with recent US tariff impositions, has added to market volatility.
“With the supportive base of the domestic macros, the long-term outlook remains intact, and investors are likely to be focused on high-quality large-cap stocks until greater clarity emerges,” Nair added.
Tariff threat
“Investors will keep an eye on the US Fed policy later today; the prospect of higher inflation due to the tariff threat may lead the FOMC to keep the rates unchanged.”
Market participants are now shifting focus to the Federal Reserve’s policy decision scheduled for later today. While a status quo on interest rates is widely anticipated, the Fed’s forward guidance will be closely monitored for cues amid heightened geopolitical risks and trade uncertainties.
“Markets will react to the outcome of the US Fed policy meeting during early trades on Thursday,” Mishra said, adding that the Fed’s commentary would be more crucial given the prevailing global uncertainty.
Published on June 18, 2025
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