On Monday, the Indian stock market faced a downturn as benchmark indices Sensex and Nifty declined amid mounting concerns over rising crude oil prices due to escalating geopolitical tensions.
The 30-share BSE Sensex dipped by 19.38 points to reach 78,479.79 during early deals. The 50-share NSE Nifty fell by 5.10 points, settling at 24,567.45.
As the trading session progressed, the situation worsened, with the BSE benchmark sliding by 158.62 points to 78,340.55. The Nifty saw a steeper fall, edging down by 45.20 points to 24,524.95.
Among the laggards in the Sensex pack were heavyweights such as Eternal, State Bank of India, and InterGlobe Aviation, along with Power Grid, NTPC, and Bharti Airtel. In contrast, stocks like Titan, Infosys, Tech Mahindra, and HCL Tech performed well in the market.
The crude oil market remains tense, with Brent crude, the global benchmark, climbing 1.03% to USD 84.41 per barrel. Market analysts indicate that high crude prices pose a significant risk to economic stability.
Rajesh Palviya, Head of Research at Axis Direct, commented, “Elevated crude prices remain a key risk. Brent crude has risen for the third consecutive session to around USD 84.4 a barrel after Iran indicated no immediate reopening of the Strait of Hormuz while weekend attacks on Gulf shipping have kept the geopolitical risk premium elevated.”
Despite these challenges, results from Foreign Institutional Investors (FIIs) indicate some optimism. On Friday, FIIs purchased equities worth Rs 480.24 crore, suggesting a cautiously positive market undertone.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, stated, “The undertone of the market is mildly bullish. The principal bullish factor is the better-than-expected Q1 results. Most companies have reported earnings growth that has exceeded expectations as earnings season nears its conclusion.”
He further noted the sustained buying trend from FIIs in July and most of August as a positive development for the market.
In regional performance, Asian markets showed a positive trend with South Korea’s KOSPI, Japan’s Nikkei 225 index, and Hong Kong’s Hang Seng index all trading higher. Specifically, Japan’s Nikkei 225 and South Korea’s Kospi each advanced more than 1%, offering a constructive backdrop for regional equities.
The U.S. markets closed positively on Friday, further indicating a possible upward correction in global stock sentiments.
“Asian markets are trading higher in early trade, with gains from major indices providing an optimistic outlook for investors,” said Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm.
On the previous Friday, the Sensex had dropped significantly, losing 455.59 points, or 0.58%, to settle at 78,499.17. Meanwhile, the Nifty declined by 65.35 points, or 0.27%, finishing at 24,570.65.
