Domestic equity benchmarks traded lower in morning deals on Tuesday as investors assessed geopolitical tensions in Middle East and their potential impact on crude oil supplies, while caution prevailed ahead of the monthly expiry of Nifty 50.
Sensex declined as much as 223 points or 0.28 per cent to hit an intraday low of 77,146 in early deals, while Nifty fell 90 points or 0.37 per cent to 24,128.
Sectorally, Nifty Media, PSU Bank, Nifty Chemicals were top gainers which jumped up to 0.6 per cent.
On the other hand, Nifty Metal was top laggard and declined 0.48 per cent, followed by Nifty Oil & Gas, which fell 0.4 per cent.
Similarly, Nifty IT declined 0.37 per cent, while Nifty Auto and Nifty Realty slipped 0.32 per cent each. Meanwhile, FMCG, healthcare, consumer durables and pharma shares were also trading lower.
Analysts expect the broader market to remain range-bound in the near term with buying emerging at lower levels and selling at higher levels and noted that the near-term range for the Nifty is seen at 24,100-24,500.
"Despite slipping through the day, yesterday’s pull back in the closing hour encourages us to look for a rise to 24,400 today. Alternatively, inability to float above 24,200 or slippage past 24,144 will expose 23,575, with last support seen at 24,060," they added.
However, market action has remained focused on the midcap and smallcap segments, where corporate developments and positive news flow have continued to trigger buying interest. Also, foreign institutional investors have been participating in these segments despite valuation concerns.
The market is also closely tracking developments around US sanctions on Iran, which have added uncertainty to the outlook for crude prices.
Analysts expect elevated oil prices to constrain any sustained rally in domestic equities in the near term.
Nifty 50 monthly derivatives contracts are scheduled to expire today adding to market volatility and caution.
In addition, crude oil prices steadied on Tuesday after a sharp decline in the previous session as investors assessed the impact of tighter US sanctions on Iran and the threat of secondary sanctions on countries trading with Tehran.
In Monday's session, foreign institutional investors turned net buyers and purchased equities worth Rs 1,181 crore, while domestic institutional investors extended their buying streak for the 10th consecutive session and invested Rs 2,493 crore.
