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Bears hold tight grip over Dalal Street
Aug-12-2026

Bears were holding a tight grip over the Dalal Street in early afternoon deals, amid continuing uncertainty about the reopening the Strait of Hormuz and the resulting spike in crude oil prices after Tehran indicated the strait will not reopen until its conditions have been met. U.S.-Iran dispute over demands for reparation costs kept Middle East tensions alive.

Both equity indices, Sensex and Nifty, were facing a weak trading session, extending losses after opening lower, amid geopolitical uncertainty and broad-based selling in heavyweight stocks. Investors were also keeping an eye on upcoming inflation data, which could influence expectations around interest rates and the broader market outlook.

On the global front, Asian markets were trading mostly in green, after Japan's machine tool order growth remained sharp in July, though the rate of increase eased since June. The preliminary data from the Japan Machine Tool Builders Association, or JMTBA, showed that machine tool orders expanded 50.4 percent year-on-year in July, following a 52.7 percent jump in the previous month. Orders have been rising since July 2025.

The BSE Sensex is currently trading at 77574.49, down by 579.76 points or 0.74% after trading in a range of 77497.93 and 78263.33. There were 4 stocks advancing against 26 stocks declining on the index.

The top gaining sectoral indices on the BSE were PSU up by 0.29%, Telecom up by 0.29%, Bankex up by 0.22%, Metal up by 0.17% and Capital Goods up by 0.15%, while IT down by 1.87%, TECK down by 1.34%, Realty down by 1.06%, Consumer Durables down by 1.02% and Utilities down by 0.97% were the top losing indices on BSE.

The top gainers on the Sensex were State Bank of India up by 1.07%, Maruti Suzuki India up by 0.25%, Bajaj Finserv up by 0.03% and ICICI Bank up by 0.00%. On the flip side, TCS down by 5.46%, Tata Steel down by 2.31%, Mahindra & Mahindra down by 1.78%, Infosys down by 1.68% and Titan Company down by 1.64% were the top losers.

Meanwhile, the rating agency -- Crisis Ratings has said that the tightening of energy-efficiency norms announced on July 30, 2026 is likely to structurally reset the profitability of legacy urea plants. It said energy-efficiency gains for these plants are estimated to decline, resulting in around 25% reduction in their profitability to around Rs 1,250 per tonne from around Rs 1,700 per tonne. Crisil explained that India’s urea manufacturing capacity broadly falls into two categories i.e. legacy plants, which account for about 74% of overall capacity, and plants set up under the New Urea Policy (NUP) 2012. Legacy plants are significantly dependent on subsidy inflows, which account for 80-85% of their revenue, while the plants set up under NUP 2012 are assured a 12% return on equity and remain insulated from the latest change in energy norms until the policy period ends.

Crisil noted that nearly three-fourths of operating profitability of legacy plants coming from urea is linked to energy-efficiency gains. With the latest tightening, these gains are set to narrow, lowering operating profitability. The impact will be most visible for the most efficient plants, where earnings from energy savings have historically been the highest. Besides, gas prices are also expected to influence the eventual impact on profitability. Higher gas prices, including those stemming from the West Asia conflict, could partly offset the decline in profitability by around Rs 75-100 per tonne this fiscal.

In spite of earnings pressure on legacy urea plants, the aggregate credit impact is expected to remain contained. Crisil pointed that legacy urea operations contribute only about 30% of EBITDA for the rated universe, with the balance generated by diversified businesses such as complex fertilisers and crop-protection chemicals. Further, balance sheets provide a buffer, with gross debt to EBITDA estimated at controlled levels of around two times this fiscal, like the previous fiscal. It added that the pace and effectiveness of energy-efficiency capex will bear watching in the coming times. At the same time, any policy support, including an upward revision in fixed-cost reimbursement, could further cushion profitability.

The CNX Nifty is currently trading at 24288.70, down by 183.00 points or 0.75% after trading in a range of 24265.95 and 24473.30. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were Hindalco Industries up by 3.17%, Grasim Industries up by 1.02%, Nestle India up by 0.99%, State Bank of India up by 0.94% and Cipla up by 0.25%. On the flip side, TCS down by 5.00%, Max Healthcare Inst. down by 3.38%, Tata Motors Passenger down by 3.29%, Titan Company down by 2.34% and Tata Steel down by 2.32% were the top losers.

Asian markets were trading mostly in green; Jakarta Composite gained 70.22 points or 1.12% to 6,338.10, KOSPI increased 233.51 points or 3.55% to 6,579.04, Taiwan Weighted added 397.35 points or 0.87% to 45,518.07, Nikkei 225 surged 568.78 points or 0.84% to 67,539.00 and Shanghai Composite strengthened 12.59 points or 0.32% to 3,946.68, while Hang Seng declined 244.82 points or 0.95% to 25,408.00 and Straits Times fell 38.14 points or 0.66% to 5,716.03.
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