Mumbai (Rajeev Sharma): Indian equities opened lower on Wednesday, with the Sensex and Nifty extending their recent decline as investors reacted to a sharp rise in crude oil prices and continuing uncertainty in the Middle East.
The BSE Sensex fell 166.19 points to 77,070.93 in early trading, while the NSE Nifty 50 was down 59 points at 24,096.75.
The weakness was broad-based, with several heavyweight stocks coming under selling pressure. Tata Steel, Larsen & Toubro, Bajaj Finance, Bharat Electronics, Power Grid and Mahindra & Mahindra were among the prominent stocks trading lower.
Some counters bucked the trend. HCL Technologies, Infosys, Eternal, Sun Pharmaceutical Industries and Kotak Mahindra Bank were among the gainers during the opening session.
Crude oil remained at the centre of investor concerns. Brent crude, the global benchmark, climbed 0.67% to $91.63 per barrel. The increase has raised concerns about the potential impact of expensive energy on inflation, business costs and India’s import bill.
Market participants are also keeping a close eye on developments involving the US and Iran. The end of a temporary 60-day ceasefire, without a major diplomatic breakthrough, has increased fears that uncertainty surrounding energy supplies could continue.
Ponmudi R, CEO of Enrich Money, said the combination of higher oil prices and rising long-term US Treasury yields had contributed to a risk-averse mood across international markets.
Global markets were also under pressure. South Korea’s Kospi dropped 5.59%, while Japan’s Nikkei 225 and Shanghai’s SSE Composite were trading lower. Hong Kong’s Hang Seng was marginally higher. US stocks also ended Tuesday’s session with losses.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, attributed the recent weakness in Indian markets primarily to higher crude prices and rising bond yields worldwide. He said uncertainty over the direction of the Middle East conflict continues to influence oil prices.
Despite the pressure on domestic equities, foreign institutional investors remained buyers on Tuesday. Data from the exchanges showed that FIIs purchased shares worth Rs 1,651.53 crore.
The latest fall comes after a weak session on Tuesday, when the Sensex lost 492.70 points, or 0.63%, to close at 77,235.46. It was the index’s third consecutive session of losses.
The Nifty also extended its losing run, falling 132.75 points, or 0.55%, to settle at 24,154.90. The decline marked its sixth straight session in negative territory.
For investors, the direction of crude oil prices, movements in global bond yields and developments in the Middle East are likely to remain key factors influencing market sentiment in the sessions ahead.
