Markets surrender early gains as global tensions weigh on sentiment

Indian equities reversed course on Tuesday after a firm start, with benchmark indices slipping into the red as concerns over escalating tensions in West Asia unsettled investors.

The Sensex, which had risen sharply in early trade, gave up gains of around 650 points through the session. The Nifty also drifted below the 23,400 mark, reflecting a broader risk-off mood across sectors.

The initial optimism, driven by selective buying in heavyweight stocks, proved short-lived. Market participants turned cautious as geopolitical developments triggered fresh volatility in global markets, pushing crude oil prices higher and dampening risk appetite.

Analysts pointed to sustained foreign institutional investor outflows and pressure on the rupee as additional factors weighing on equities. The currency’s proximity to record lows has heightened concerns around imported inflation, particularly with crude prices firming up.

Sectorally, weakness was visible across information technology and financial stocks, which dragged the indices lower. Defensive pockets saw limited interest, but failed to offset the broader decline.

With global cues dictating direction, traders are expected to remain guarded in the near term. Much will depend on the trajectory of oil prices and clarity on geopolitical developments, both of which are likely to shape market sentiment in the sessions ahead.