Sensex, Nifty End Lower As Oil Prices Surge On Supply Fears

Indian shares ended Tuesday’s session lower as oil prices jumped more than 2 percent on signs of escalating tensions in the Middle East.

The risks of the Israel-Gaza conflict morphed into a wider regional conflict after U.S. helicopters repelled an attack on Sunday by Iran-backed Houthi militants on a Maersk container vessel in the Red Sea, a vital trade route between Europe and Asia.

Iran, meanwhile, sent a warship to the Red Sea in response to the U.S. Navy’s sinking of three Houthi boats over the weekend that had killed about 10 Houthi fighters.

A firmer dollar and an uptick in Treasury yields also weighed on sentiment as investors braced for a slew of key U.S. economic data lined for release this week.

U.S. reports on manufacturing and service sector activity may attract attention along with the minutes of the latest Federal Reserve meeting.

ADP’s private payrolls report on Wednesday and December’s jobs report on Friday may provide further evidence that the Federal Reserve is likely to cut interest rates this year.

The benchmark S&P BSE Sensex fell 379.46 points, or 0.53 percent, to 71,892.48 while the broader NSE Nifty index settled 76.10 points, or 0.35 percent, lower at 21,665.80.

Among the prominent decliners, Kotak Mahindra Bank, Larsen & Toubro, UltraTech Cement, Mahindra & Mahindra and Eicher Motors fell 2-4 percent.

Among those that gained, Cipla, Coal India, Sun Pharma, Adani Ports and Divis Laboratories all rose around 3 percent.

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