Sensex, Nifty End Choppy Session Marginally Lower; Banks Lead Losses

Indian shares ended a choppy session marginally lower on Tuesday as a stronger dollar and rising Treasury yields in international markets weighed on investors’ appetite for risk.

The U.S. dollar saw a notable rise while yields hit a one-month high after the U.S. Supreme Court ruled that presidents have absolute immunity from prosecution for core official acts.

There’s growing talk about a potential Trump presidency leading to a steeper yield curve as growth will likely slow and inflation quicken under such a scenario, according to Morgan Stanley. Barclays and Nomura also issued calls to factor in a Trump win.

Rising oil prices on expectations for higher fuel demand during the U.S. summer travel season coupled with political uncertainty in France and U.K. ahead of upcoming elections also prompted traders to book profits at higher levels after recent strong gains.

Oil prices maintained positive momentum to trade around two-month highs in European trade amid expectations that gasoline demand in the U.S., the world’s biggest oil consumer, will recover after a subdued first half of 2024.

The benchmark S&P/BSE Sensex swung between gains and losses before ending the session down 34.74 points at 79,441.45.

The broader NSE Nifty index also fluctuated before settling at 24,123.85, down 18.10 points from its previous close.

Banks and financials were among the top drags, with IndusInd Bank, Kotak Mahindra and Shriram Finance falling 2-3 percent.

Telecom Bharti Airtel lost 2.4 percent and automaker Tata Motors gave up 2 percent while Tata Consumer Products, Infosys, Wipro and Larsen & Toubro rallied 2-3 percent.