Indian benchmark equity indices opened on a subdued note on Thursday as rising crude oil prices and escalating geopolitical tensions in the Middle East dampened investor sentiment, despite support from resilient domestic fundamentals and sustained foreign portfolio investor (FPI) inflows.
At the opening bell, the BSE Sensex was trading at 77,638.86, down 15.74 points or 0.02 per cent, while the Nifty 50 stood at 24,249.55, lower by 0.65 points.
Market participants remained cautious as Brent crude hovered near USD 90 per barrel amid renewed tensions involving the United States and Iran.
Banking and market expert Ajay Bagga said Indian markets were attempting to decouple from weakness in global technology stocks, but elevated crude oil prices continued to pose a significant challenge.
“Indian markets are trying to decouple from the global chip carnage, but crude remains the tether. This morning the USD 90 Brent and renewed US attacks on Iran will keep Indian markets subdued,” Bagga told ANI.
He added that the widening conflict involving key maritime trade routes, including the Strait of Hormuz, the Red Sea, and the Caspian Sea, has heightened concerns over global energy supplies and overall market stability.
Investors also assessed the US Federal Reserve’s decision to keep interest rates unchanged at 3.5–3.75 per cent. However, the 9-3 split vote within the Federal Open Market Committee (FOMC), with three members favouring a rate hike, reinforced expectations that the central bank could tighten monetary policy further if inflation remains elevated.
Among sectoral indices on the NSE, Nifty IT led gains, rising 1.39 per cent, followed by Nifty Pharma (0.54 per cent), Nifty Auto (0.32 per cent), Nifty Oil & Gas (0.26 per cent), Nifty FMCG (0.18 per cent), and Nifty Metal (0.05 per cent). Nifty PSU Bank and Nifty Media traded lower in early trade.
At the time of reporting, Brent crude was trading at USD 89.58 per barrel.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said higher crude prices and the US Federal Reserve’s relatively hawkish stance remained key headwinds for equity markets.
He noted that while the spike in oil prices and geopolitical tensions could weigh on sentiment, India’s resilient economy, strong macroeconomic fundamentals and net FPI inflows in July are expected to provide support to domestic equities.
Across Asia, markets traded mixed in early trade. Japan’s Nikkei 225 rose more than 1 per cent, Taiwan’s Weighted Index gained 0.18 per cent, and South Korea’s KOSPI advanced 0.28 per cent. Meanwhile, Singapore’s Straits Times and Hong Kong’s Hang Seng traded in negative territory.
-ANI
