Sensex, Nifty open lower as US-Iran tensions push crude above $76
The BSE Sensex was down 535.44 points, or 0.68%, at 77,645.28, while the NSE Nifty50 declined 158.45 points, or 0.65%, to 24,241.00 at around 9:25 am.
Benchmark equity indices opened lower on Wednesday after renewed tensions between the United States and Iran triggered a spike in crude oil prices, dampening investor sentiment across global markets.
The BSE Sensex was down 535.44 points, or 0.68%, at 77,645.28, while the NSE Nifty50 declined 158.45 points, or 0.65%, to 24,241.00 at around 9:25 am.
Brent crude jumped over 2% to around $76 a barrel after the US military launched a series of strikes against Iran, raising fresh concerns over energy supplies and geopolitical stability. Higher crude prices are a key risk for India as they can increase the country's import bill, fuel inflation and weigh on economic growth.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the renewed geopolitical tensions have pushed markets back into uncertain territory.
"With the renewed US-Iran tensions and the consequent spike in Brent crude to $76, the market is again back to uncertain territory. How long this would last and what would be its consequences are now in the realm of uncertainty," he added.
The rupee also opened weaker, falling 0.2% to 95.1725 against the US dollar from its previous close of 94.9675.
OIL SURGE DRAGS MARKETS LOWER
Selling was broad-based, with most benchmark stocks trading in the red despite gains in a handful of IT and pharmaceutical companies.
Among Sensex constituents, Sun Pharma emerged as the top gainer, rising 1.02%, followed by HCLTech, up 0.57%, Infosys, which gained 0.31%, TCS, up 0.17%, Tech Mahindra, which rose 0.11%, and Power Grid, also higher by 0.11%.
On the losing side, IndiGo declined 2.47%, Asian Paints fell 2.12%, Reliance Industries lost 2.08%, Maruti Suzuki slipped 1.57%, M&M dropped 1.53%, Bajaj Finance fell 1.25%, UltraTech Cement declined 1.09%, Hindustan Unilever lost 1.03%, SBI slipped 1.00%, Eternal fell 0.90%, ITC declined 0.90%, Bajaj Finserv dropped 0.82%, LT fell 0.79%, BEL and Kotak Mahindra Bank lost 0.73% each, while Tata Steel declined 0.61%.
BROADER MARKETS, SECTORS UNDER PRESSURE
The broader market also traded lower. The Nifty 100 fell 0.66%, Nifty 200 declined 0.59%, Nifty 500 lost 0.53%, Nifty Midcap 50 slipped 0.30%, Nifty Midcap 100 fell 0.28%, and Nifty Smallcap 100 declined 0.25%. India VIX, the market's fear gauge, jumped 7.01%, indicating a rise in volatility.
Sectorally, the weakness was widespread. Nifty Oil & Gas fell 1.69%, Nifty Auto declined 1.20%, Nifty Financial Services Ex-Bank dropped 1.08%, Nifty PSU Bank lost 1.01%, Nifty FMCG declined 0.80%, Nifty Media fell 0.83%, Nifty Financial Services 25/50 slipped 0.72%, Nifty MidSmall Financial Services lost 0.67%, Nifty Realty declined 0.60%, Nifty Private Bank fell 0.47%, Nifty Chemicals slipped 0.38%, Nifty MidSmall IT & Telecom declined 0.28%, Nifty Consumer Durables fell 0.24%, and Nifty Metal edged lower by 0.18%.
Defensive sectors bucked the trend. Nifty Pharma gained 0.89%, Nifty 500 Healthcare rose 0.79%, Nifty Healthcare Index advanced 0.78%, Nifty MidSmall Healthcare added 0.72%, while Nifty IT edged up 0.13%.
"The market was slowly gaining strength on positive FII activity and improving macro fundamentals. The renewed US-Iran tensions have put a temporary question mark on this positive development. Therefore, investors have to wait and watch the developments," said Vijaykumar.
He added that the weakness in the global chip trade and foreign institutional investors turning buyers in India remain important positives.
"During the last three days FIIs have been consistent buyers in the Indian market, having bought equity worth Rs 1,991 crore. Even though the amount is small, this marks a significant trend in FII activity. The uncertainty surrounding the chip trade and the huge concentration risks associated with investing in three stocks are turning FIIs away from markets like South Korea and Taiwan towards stable markets like India," said Vijaykumar.
"If the US-Iran tensions don't escalate further, the FII activity will continue to favour India. This can change if the tensions escalate and crude again flares up, impacting India's macro fundamentals," he added.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
Benchmark equity indices opened lower on Wednesday after renewed tensions between the United States and Iran triggered a spike in crude oil prices, dampening investor sentiment across global markets.
The BSE Sensex was down 535.44 points, or 0.68%, at 77,645.28, while the NSE Nifty50 declined 158.45 points, or 0.65%, to 24,241.00 at around 9:25 am.
Brent crude jumped over 2% to around $76 a barrel after the US military launched a series of strikes against Iran, raising fresh concerns over energy supplies and geopolitical stability. Higher crude prices are a key risk for India as they can increase the country's import bill, fuel inflation and weigh on economic growth.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the renewed geopolitical tensions have pushed markets back into uncertain territory.
"With the renewed US-Iran tensions and the consequent spike in Brent crude to $76, the market is again back to uncertain territory. How long this would last and what would be its consequences are now in the realm of uncertainty," he added.
The rupee also opened weaker, falling 0.2% to 95.1725 against the US dollar from its previous close of 94.9675.
OIL SURGE DRAGS MARKETS LOWER
Selling was broad-based, with most benchmark stocks trading in the red despite gains in a handful of IT and pharmaceutical companies.
Among Sensex constituents, Sun Pharma emerged as the top gainer, rising 1.02%, followed by HCLTech, up 0.57%, Infosys, which gained 0.31%, TCS, up 0.17%, Tech Mahindra, which rose 0.11%, and Power Grid, also higher by 0.11%.
On the losing side, IndiGo declined 2.47%, Asian Paints fell 2.12%, Reliance Industries lost 2.08%, Maruti Suzuki slipped 1.57%, M&M dropped 1.53%, Bajaj Finance fell 1.25%, UltraTech Cement declined 1.09%, Hindustan Unilever lost 1.03%, SBI slipped 1.00%, Eternal fell 0.90%, ITC declined 0.90%, Bajaj Finserv dropped 0.82%, LT fell 0.79%, BEL and Kotak Mahindra Bank lost 0.73% each, while Tata Steel declined 0.61%.
BROADER MARKETS, SECTORS UNDER PRESSURE
The broader market also traded lower. The Nifty 100 fell 0.66%, Nifty 200 declined 0.59%, Nifty 500 lost 0.53%, Nifty Midcap 50 slipped 0.30%, Nifty Midcap 100 fell 0.28%, and Nifty Smallcap 100 declined 0.25%. India VIX, the market's fear gauge, jumped 7.01%, indicating a rise in volatility.
Sectorally, the weakness was widespread. Nifty Oil & Gas fell 1.69%, Nifty Auto declined 1.20%, Nifty Financial Services Ex-Bank dropped 1.08%, Nifty PSU Bank lost 1.01%, Nifty FMCG declined 0.80%, Nifty Media fell 0.83%, Nifty Financial Services 25/50 slipped 0.72%, Nifty MidSmall Financial Services lost 0.67%, Nifty Realty declined 0.60%, Nifty Private Bank fell 0.47%, Nifty Chemicals slipped 0.38%, Nifty MidSmall IT & Telecom declined 0.28%, Nifty Consumer Durables fell 0.24%, and Nifty Metal edged lower by 0.18%.
Defensive sectors bucked the trend. Nifty Pharma gained 0.89%, Nifty 500 Healthcare rose 0.79%, Nifty Healthcare Index advanced 0.78%, Nifty MidSmall Healthcare added 0.72%, while Nifty IT edged up 0.13%.
"The market was slowly gaining strength on positive FII activity and improving macro fundamentals. The renewed US-Iran tensions have put a temporary question mark on this positive development. Therefore, investors have to wait and watch the developments," said Vijaykumar.
He added that the weakness in the global chip trade and foreign institutional investors turning buyers in India remain important positives.
"During the last three days FIIs have been consistent buyers in the Indian market, having bought equity worth Rs 1,991 crore. Even though the amount is small, this marks a significant trend in FII activity. The uncertainty surrounding the chip trade and the huge concentration risks associated with investing in three stocks are turning FIIs away from markets like South Korea and Taiwan towards stable markets like India," said Vijaykumar.
"If the US-Iran tensions don't escalate further, the FII activity will continue to favour India. This can change if the tensions escalate and crude again flares up, impacting India's macro fundamentals," he added.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
