Sensex and Nifty closed lower, with IT stocks offering rare support.
Global Headwinds Hit Home: Markets Lose Steam
On June 18, Indian equity markets mirrored global unease, with the BSE Sensex fell 138.64 points to 81,444.66 and the Nifty 50 slipping 41.35 points to 24,812.05. The cautious mood was driven by two major forces: the U.S. Federal Reserve’s ambiguous rate outlook and the deepening conflict in the Middle East.
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The Fed’s decision to hold interest rates steady at 4.25-4.50% was expected, but its projection of only two rate cuts in 2025 disappointed investors hoping for a more dovish stance. Fed Chair Jerome Powell’s comment that the economic outlook remains “foggy” did little to calm nerves.
Meanwhile, the Israel-Iran conflict continued to escalate, pushing Brent crude prices higher and stoking fears of supply disruptions. For oil-import-dependent India, this spells trouble rising input costs, inflationary pressure, and a potential drag on growth.
Sectoral Snapshot: IT Shines, Others Sink
The market’s breadth was decisively negative. On the Nifty 50, only 11 stocks ended in the green, while 38 declined. Tech Mahindra led the gainers with a 1.66% rise, buoyed by a stronger U.S. dollar and optimism around digital transformation deals. Other IT majors like Infosys and HCL Tech also posted modest gains.
But beyond IT, the picture was grim. Pharma, metals, realty, and auto stocks all saw declines of over 1%. Heavyweights like Cipla, ONGC, Sun Pharma, and Tata Motors dragged the indices down, each shedding up to 2%.
The Bank Nifty index bucked the trend slightly, closing 114.60 points higher at 55,828.75, thanks to gains in IndusInd Bank and Kotak Mahindra Bank. However, broader indices like the Nifty Midcap 100 and Smallcap 100 fell by 0.46% and 0.23%, respectively, reflecting a risk-off sentiment.
What’s Next: Sensex fell – Volatility Ahead as Markets Seek Clarity
With no major domestic triggers in sight, global cues will continue to steer the market. The weekly Nifty derivatives expiry and the Bank of England’s rate decision are likely to inject further volatility. Analysts also warn that any escalation in the Middle East could send oil prices soaring, putting pressure on India’s current account and inflation outlook.
The Indian rupee weakened to ₹86.42 against the U.S. dollar, reflecting foreign investor caution and rising crude prices. According to analysts, the rupee could trade between ₹85.75 and ₹86.55 in the near term.
Despite the turbulence, FIIs and DIIs remained net buyers, injecting ₹890.93 crore and ₹1,091.34 crore, respectively, into the market. This suggests that long-term confidence in Indian equities remains intact, even as short-term sentiment wavers.
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