Crude Above $100, Global Tensions Drag Sensex and Nifty Lower

The BSE Sensex was trading at 77,400.63 points, down 443.89 points or 0.57 per cent, while the NSE Nifty 50 slipped 113.65 points or 0.47 per cent to 24,213.00 points in early trade.

Selling pressure was seen largely in banking and automobile stocks. The Nifty Private Bank index declined 0.96 per cent, while the Nifty Auto and Nifty Oil & Gas indices fell 0.87 per cent and 0.78 per cent, respectively.

Other key sectors, including financial services and PSU banks, also traded in the red, losing 0.75 per cent and 0.68 per cent respectively. However, selective buying in FMCG, IT and pharma stocks offered limited support to the broader market.

The weakness in equities also coincided with a sharp uptick in commodity prices. At the time of filing this report, Brent crude rose 0.97 per cent to USD 101.03 per barrel, while crude oil prices gained 0.82 per cent to USD 95.59. Gold prices also advanced 0.82 per cent to USD 4,724.76.

Despite the cautious opening, market experts noted that Indian equities remain volatile yet resilient, supported by strong participation in broader market segments such as midcaps, defence, capital goods and power stocks.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the uncertainty surrounding developments in West Asia continues to keep markets on edge.

"An important market trend amidst this crisis is that despite this geopolitical tension some markets are doing extremely well while some others are performing poorly. South Korea and Taiwan are the star performers this year with 71% and 40% returns YTD. These excellent returns have been generated by a few AI stocks," Vijayakumar said.

He further stated that crude oil remains the biggest variable for Indian markets, and any easing in US-Iran tensions could provide strong support to equities as well as the Indian rupee.

While the US Federal Reserve continues to maintain a cautious stance, improving global liquidity expectations are offering some comfort to risk assets. However, persistent dollar strength and rupee weakness are still keeping foreign institutional investors selective in their India exposure.

The ongoing battle between Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) continues to shape market direction. FIIs remain inconsistent and tactical in their approach, whereas domestic institutions are steadily absorbing selling pressure.

"In contrast, India, impacted by the energy crisis, has delivered negative returns with Nifty posting -6.96% return YTD. An important trend in India is the outperformance of the broader market. The Nifty Midcap index is now at a record high despite high valuations. Nifty is being weighed down by sustained FPI selling, particularly in heavyweights in banking and IT," added Vijayakumar.

But robust SIP inflows and sustained retail participation are continuing to provide strength to the broader markets despite volatility in benchmark indices.

- ANI