Benchmark stock market indices opened higher on Wednesday, despite crude oil prices inching higher with the UAE announcing to exit the OPEC group.
The S&P BSE Sensex was up 363.81 points to 77,250.72, while the NSE Nifty50 gained 119.70 points to 24,115.40 as of 9:30 am.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said that even though there are important developments happening in the Gulf region, there is no solution to the energy crisis caused by the closure of the strait of Hormuz.
“UAE’s decision to quit OPEC might have a bearing on crude prices in the medium term but it is unlikely to ease crude prices in the near-term. There are indications that the US-Iran stand off may continue much longer. Brent crude at $110 is negative for India. As long as crude price remains elevated, the downside risk to India’s growth and the upside risk to inflation will remain high,” he added.
After the opening bell, Maruti Suzuki India Ltd led the Sensex gainers, rising 4.29%. It was followed by ITC Ltd, which gained 2.10%. Mahindra and Mahindra Ltd moved up 1.67%, while Eternal Ltd added 1.22%. Bharti Airtel Ltd also opened higher, rising 1.17%.
Tata Steel Ltd saw the sharpest fall, dropping 1.19%. Asian Paints Ltd declined 0.59%, NTPC Ltd was down 0.43%, ICICI Bank Ltd slipped 0.40%, and Axis Bank Ltd fell 0.28% in early trade.
“The market will also be closely watching the political developments after the state elections end today. The exit polls this evening might give indications of possible outcomes,” said Vijaykumar.
“The Fed decision today will be a pause in the light of the uncertainty surrounding the West Asia conflict and rising inflation. The message from the Fed chief will be more important,” he added.
