Sensex falls 374 points, Nifty below 23,915 on oil, bond yield spike

The Sensex fell 373.93 points, or 0.49%, to 76,570.35 on Tuesday, weighed down by a spike in oil prices and rising bond yields.

The Nifty50 closed at 23,914.45, down 141.35 points, or 0.59%, as benchmark indices posted their third straight day of losses.

Overnight strikes exchanged between the US and Iran fuelled fears of oil supply disruptions from the Strait of Hormuz, lifting Brent crude 0.76% to $95.37 a barrel.

Nifty Auto was the worst performer among sectors, down 2%, with IT and Media stocks also lagging, while Oil and Gas, PSU Bank and Realty held up.

Eicher Motors, Wipro and Bajaj Auto featured among the biggest losers on the Nifty50 as rising bond yields dented investor appetite for equities.

Eicher Motors, Wipro and Bajaj Auto were among the top losers on the Nifty50 index during the session.

Broader markets also came under pressure, with the Nifty MidCap index ending 0.53% lower and the Nifty SmallCap index down 0.37%.

This marked the third straight session of losses for the benchmark indices, as rising bond yields further dented investor risk appetite.

Rising bond yields typically make fixed-income investments more attractive relative to equities, prompting some investors to shift allocations away from stocks.

Markets will be closely watching for further developments in the Middle East, given the direct link between regional tensions and global crude oil supply concerns.

The US and Iran exchanged strikes overnight, intensifying fears of further supply disruptions from the Strait of Hormuz, a key global oil shipping route.

Brent crude rose 0.76% to $95.37 per barrel during the session, adding to inflation concerns among investors.

Nifty Auto was the worst-hit sectoral index, declining 2%, with Nifty IT and Nifty Media also underperforming during the session.

In contrast, Nifty Oil and Gas, PSU Bank and Realty indices outperformed, providing some counterbalance to the broader market decline.

Photo of the Bombay Stock Exchange building, Wikimedia Commons, CC BY 2.0