Sensex ends flat as West Asia tensions, oil spike weigh on sentiment

Indian stock markets ended Monday's session largely flat, with the benchmark Sensex and Nifty struggling to hold onto early gains as escalating tensions in West Asia and a spike in crude oil prices kept investors on edge.

The BSE Sensex closed at 82,245.67, down 12.34 points or 0.01%, while the NSE Nifty settled at 25,112.80, a marginal loss of 3.15 points. The broader markets showed mixed trends, with midcap and smallcap indices outperforming the benchmarks.

Oil prices, geopolitical jitters dominate trading

Crude oil prices climbed over 2% during the session, breaching the $82 per barrel mark for Brent crude, as fresh geopolitical developments in West Asia raised supply disruption fears. Traders said the spike in energy costs added to inflationary concerns, prompting profit-booking in heavyweight sectors like banking and auto.

Oil marketing companies were among the early losers, while aviation stocks also came under pressure on fears of higher fuel costs. Analysts noted that the market's inability to sustain positive momentum reflected a cautious stance ahead of key data from the US and Europe due later this week.

IT, pharma stocks provide some support

Select IT and pharmaceutical stocks managed to buck the trend, providing limited support to the indices. The Nifty IT index edged up 0.5%, driven by buying in frontline names after recent corrections. Pharma stocks also saw modest gains, with the Nifty Pharma index closing 0.3% higher.

Banking and financial stocks were mixed, with private lenders showing some resilience while public sector banks faced selling pressure. The Nifty Bank index ended the day flat, reflecting the overall indecisiveness in the market.

Broader market shows resilience

Despite the flat close in the benchmarks, the broader market displayed relative strength. The BSE Midcap index rose 0.3%, while the Smallcap index added 0.5%. Market breadth was positive, with 1,856 stocks advancing against 1,702 declines on the BSE.

Analysts said this divergence suggests that retail and domestic institutional investors are still willing to deploy capital in select pockets, even as foreign portfolio investors remain cautious. Provisional data showed foreign investors were net sellers of around Rs 450 crore in the cash market, while domestic institutions were net buyers of Rs 380 crore.

What to watch this week

Investors will closely monitor global crude oil prices and any further developments in West Asia. The release of US inflation data later this week and the European Central Bank's policy meeting minutes are also expected to influence market direction.

On the domestic front, quarterly earnings season is set to pick up pace, with several large-cap companies scheduled to report results. Market participants will watch for commentary on demand trends and margin outlook, particularly in sectors sensitive to input costs.

The market's near-term trajectory will likely depend on how geopolitical risks evolve and whether crude prices sustain at elevated levels. A prolonged spike could pressure fiscal metrics and corporate margins, keeping sentiment fragile.