Mumbai— Indian equity benchmarks closed largely unchanged on Tuesday as strong earnings from infrastructure giant Larsen & Toubro (L&T) were offset by investor caution over a delayed trade deal with the United States and uncertainty surrounding U.S. Federal Reserve policy.
The NSE Nifty 50 rose marginally by 0.08% to close at 24,840, while the BSE Sensex edged up 0.04% to settle at 81,372. The muted movement comes amid foreign investor outflows and a weakening rupee, both of which have weighed on market sentiment.
L&T shares surged nearly 4.5% after the company beat quarterly profit expectations and reported robust order inflows. The positive performance prompted multiple brokerages to upgrade their price targets, with the median now at ₹4,070.50. Analysts say L&T remains well-positioned due to India’s continued infrastructure push.
However, gains were capped as Tata Motors dropped over 3.5% following reports of a proposed $4.5 billion acquisition of Italy’s Iveco. Investors expressed concern about potential stress on the company's balance sheet.
Kotak Mahindra Bank also weighed down financial indices, falling by 7% after reporting disappointing earnings. The slump contributed to a broader dip in banking stocks.
Market participants remained jittery over the lack of progress in the much-anticipated U.S.-India trade deal. With an August 1 deadline looming, failure to reach a resolution could trigger punitive tariffs on Indian exports, a risk that has led to increased volatility.
Adding to the pressure, the Indian rupee weakened to ₹86.9 against the U.S. dollar, its lowest level since mid-March. Analysts attributed the fall to strong dollar demand from state-run banks and persistent foreign institutional investor (FII) outflows, which have reached nearly ₹60 billion in recent days.
Investors are also closely watching the U.S. Federal Reserve, which is expected to maintain interest rates. However, any hawkish tone from Fed Chair Jerome Powell could dampen global risk appetite, further impacting emerging markets like India.
Despite L&T’s earnings-driven rally, the broader market is likely to remain range-bound until clarity emerges on both the trade front and global monetary policy. Analysts expect continued volatility amid macroeconomic uncertainties and sector-specific earnings reports.