Markets open lower amid renewed geopolitical tensions, rising crude oil prices
Mumbai, Aug 31
Domestic equity benchmarks opened lower on Monday weighed down by weakness across Asian markets and a sharp rise in crude oil prices amid renewed tensions in the Middle East.
Sensex opened at 77,130.73, down 133.78 points or 0.17 per cent, while Nifty fell 58.10 points or 0.24 per cent to 24,117.55.
Sector-wise, Nifty Metal was top loser and fell 1.70 per cent, followed by Nifty IT which declined 1.32 per cent. Nifty Media and Nifty PSU Bank also fell up to 1 per cent.
Other sector indices, realty, cement, chemicals and FMCG declined between 0.73 per cent and 1 per cent.
In contrast, Nifty Private Bank was trading marginally positive, edging up 0.06 per cent in early trade.
"Monday's trading begins with the market facing a few headwinds. From the global equity market perspective, sentiments have turned slightly negative following Fed chief Kevin Warsh's statement that if inflation persists at rates higher than the Fed's long-term target, 'we have work to do'," said market experts.
The comments have been interpreted by the market as a signal of a possible rate hike at the FOMC meeting scheduled for September 15-16. The resulting rise in bond yields is negative for equities, they said.
Another headwind is the renewed escalation in tensions between the US and Iran, which has pushed Brent crude above the $90-a-barrel mark. The HDFC Bank stock is also likely to remain in focus and could turn volatile amid speculation over the successor to CEO Sasidhar Jagadishan, the experts added.
"Even if the Nifty comes under pressure, lots of action are likely in the broader market which is attracting big buying in recent weeks. A significant recent trend in the market is that the market is giving more preference to growth than value," according to them.
On the technical front, Friday's inside bar pattern has retained hopes of an upswing from the vicinity of 24,060, which would also be consistent with the consolidation band that has been in play for the last eight days.
"However, we would wait for a break above 24,215 to signal strength. Alternatively, inability to float above 24,060 would expose 23,575," the expert said.
Additionally, the market is also bracing for heightened volatility from MSCI's index rejig under the new closing auction system, while renewed tensions in the Iran war and developments at HDFC Bank added to investor caution.
Meanwhile, international benchmark Brent crude rose more than 2 per cent to $90.67 a barrel, while US West Texas Intermediate (WTI) crude gained 2.06 per cent to $85.09 a barrel.
Asian markets also remained largely weak. Japan's Nikkei traded more than 1 per cent lower, while Hong Kong's Hang Seng fell 0.7 per cent and South Korea's KOSPI slipped more than 1 per cent.
— IANS
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