The Indian stock markets, including benchmark indices Sensex and Nifty, experienced a downturn in early trade on Monday, driven by a notable spike in crude oil prices. The dip reflects rising investor apprehensions linked to ongoing geopolitical uncertainties.
The 30-share BSE Sensex experienced a decline of 19.38 points, landing at 78,479.79 shortly after the opening bell. Similarly, the 50-share NSE Nifty also fell, skidding down 5.10 points to reach 24,567.45.
As trading progressed, the situation worsened. The BSE benchmark further decreased by 158.62 points, settling at 78,340.55, while the Nifty edged down by 45.20 points to 24,524.95.
Among the Sensex constituents, notable laggards included Eternal, State Bank of India, InterGlobe Aviation, Power Grid, NTPC, and Bharti Airtel. In contrast, Titan, Infosys, Tech Mahindra, and HCL Tech showcased gains during the morning trade.
The rise in crude prices plays a significant role in market movements. Brent crude, the global oil benchmark, traded 1.03 percent higher at USD 84.41 per barrel. Rajesh Palviya, Head of Research at Axis Direct, highlighted that “elevated crude prices remain a key risk for markets”. He noted the recent rise marked the third consecutive session following indications from Iran regarding the Strait of Hormuz’s reopening, coupled with weekend attacks on Gulf shipping.
Despite these challenges, Foreign Institutional Investors (FIIs) showed resilience. They purchased equities worth Rs 480.24 crore according to exchange data on Friday. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, commented, “The undertone of the market remains mildly bullish, driven primarily by better-than-expected Q1 results. The earnings season is nearing its conclusion, with most companies reporting earnings growth that exceeds expectations.” He also remarked on the continuous purchasing trend from FIIs in July and August, seen as a positive sign for market stability.
Asian markets reflected a mixed outcome in early trading, with South Korea’s KOSPI, Japan’s Nikkei 225 index, Shanghai’s SSE Composite index, and Hong Kong’s Hang Seng index trading higher, indicating a potential regional recovery.
The US markets ended positively on Friday, which adds an interesting layer to investor dynamics. Ponmudi R, CEO of Enrich Money, emphasized this by stating, “Asian markets are trading higher, with Japan’s Nikkei 225 and South Korea’s Kospi each surpassing a 1 percent increase, creating a favorable backdrop for regional equities.”
On the previous trading day, Friday, the Sensex faced a decline of 455.59 points, equating to a drop of 0.58 percent, closing at 78,499.17. Likewise, the Nifty experienced a fall of 65.35 points, or 0.27 percent, concluding at 24,570.65. The consistent volatility exhibits investors’ persistent caution as the crude oil prices exert additional pressure on market performance.
