Indian markets concluded a volatile session with slight declines on Tuesday, influenced by a stronger U.S. dollar and increasing Treasury yields in global markets, which diminished investors' risk appetite.
The U.S. dollar experienced a significant rise, and Treasury yields reached a one-month high following a U.S. Supreme Court decision granting presidents absolute immunity from prosecution for core official acts.
Speculation is rising about the potential impacts of a Trump presidency, with expectations of a steeper yield curve due to anticipated slower growth and accelerated inflation in such a scenario, according to Morgan Stanley. Both Barclays and Nomura have also recommended considering a Trump victory in their forecasts.
Further fueling market moves, escalating oil prices driven by anticipated higher fuel demand during the U.S. summer travel season, along with political uncertainties in France and the U.K. ahead of their upcoming elections, led traders to book profits at elevated levels following recent gains.
Oil prices continued their upward momentum, trading near two-month highs in European markets, amid expectations that U.S. gasoline demand, the world's largest oil consumer, will rebound after a sluggish first half of 2024.
The benchmark S&P BSE Sensex fluctuated between gains and losses before closing 34.74 points lower at 79,441.45.
Similarly, the broader NSE Nifty index experienced volatility, settling at 24,123.85, down 18.10 points from the previous close.
Banks and financials were among the top decliners, with IndusInd Bank, Kotak Mahindra, and Shriram Finance falling between 2-3%.
In the telecom sector, Bharti Airtel dropped 2.4%, while automaker Tata Motors fell by 2%. Conversely, Tata Consumer Products, Infosys, Wipro, and Larsen & Toubro saw gains of 2-3%.
