In early trade on Monday, India’s stock markets registered declines as benchmark indices Sensex and Nifty fell due to a spike in crude oil prices influenced by ongoing geopolitical tensions. The sell-off resulted from market participants reacting to rising energy costs.
The 30-share BSE Sensex started lower, dropping 19.38 points to 78,479.79. The 50-share NSE Nifty also skidded, down by 5.10 points to 24,567.45. As trading progressed, the situation worsened; the Sensex fell by 158.62 points to reach 78,340.55, while the Nifty dipped by 45.20 points to settle at 24,524.95.
Among the laggards in the Sensex pack were notable names like Eternal, State Bank of India, InterGlobe Aviation, Power Grid, NTPC, and Bharti Airtel. In contrast, Titan, Infosys, Tech Mahindra, and HCL Tech emerged as winners amidst the market decline.
The escalation in crude prices remains a significant concern for investors. Brent crude, the global oil benchmark, traded 1.03% higher, reaching USD 84.41 per barrel. Rajesh Palviya, Head of Research at Axis Direct, explained, “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.”
On the foreign investment front, Foreign Institutional Investors (FIIs) purchased equities worth Rs 480.24 crore on Friday, as per exchange data. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, provided a positive outlook, stating, “The undertone of the market is mildly bullish. The principal bullish factor is the better-than-expected Q1 results. With the earnings season coming to an end this week, a vast majority of companies have reported earnings growth that has beaten expectations.”
He also noted that FIIs returning to the market and maintaining buying trends in July and August is another optimistic sign.
Looking beyond Indian shores, Asian markets witnessed mixed signals. South Korea’s KOSPI, Japan’s Nikkei 225 index, Shanghai’s SSE Composite index, and Hong Kong’s Hang Seng index all reported minor gains. US markets finished positively on Friday, encouraging regional optimism.
Ponmudi R, CEO of Enrich Money, highlighted the robust performance of Asian indices, noting, “Asian markets are trading higher in early trade, with Japan’s Nikkei 225 and South Korea’s Kospi each advancing more than 1 per cent, providing a constructive backdrop for regional equities.”
In the previous week, the Sensex had dropped 455.59 points, or 0.58%, concluding at 78,499.17. Similarly, the Nifty dipped by 65.35 points, or 0.27%, ending at 24,570.65. As global economic indicators shift, investors remain cautious, scrutinizing crude oil prices that pose a threat to market stability.
