Benchmark indices opened lower on Thursday as elevated crude oil prices continued to weigh on investor sentiment, even as some IT and consumer-facing stocks offered support. Investors are also watching global cues and the outlook for crude, which remains a key risk for Indian markets.
The BSE Sensex opened at 78,111.91 and was down 161.17 points, or 0.21%, at 77,805.18 by 9:22 am. The NSE Nifty 50 opened at 24,431.60 and was down 90.55 points, or 0.37%, at 24,345.40.
The market opened in a mixed fashion, with some large-cap stocks gaining while several banking, energy and industrial names remained under pressure. The Nifty Smallcap 100 was up 0.26%, while the Nifty Midcap 50, Nifty Midcap 100 and Nifty 200 were down 0.11%, 0.09% and 0.28%, respectively.
CRUDE OIL REMAINS A KEY CONCERN
Crude oil prices continued to remain elevated, although they were lower in early trade. WTI crude was trading at $82.44 a barrel, down 1%, while Brent crude was at $88.22, down 0.85%.
For India, higher crude prices remain a concern because the country is a major oil importer. A sustained rise in crude can increase the import bill, put pressure on inflation and squeeze corporate margins.
Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, “The market is likely to continue along the consolidation phase and sideways movements in the near-term. The tailwind for the market is the strong fundamentals coming from robust growth and earnings momentum which , in turn, is getting support from sustained liquidity flows from domestic investors. High frequency indicators like GST collections, freight, auto sales and credit growth are big positives that can surprise growth and earnings on the upside.
“The main headwind continues to be the elevated crude prices and the uncertainty regarding the crude price trends.
“The ideal investment strategy at this juncture is to remain invested and continuing to invest systematically.”
IT, CONSUMER STOCKS OFFER SUPPORT
Among Sensex stocks, IndiGo was the top gainer, rising 1.53%, followed by Eternal, which gained 1.26%. Tech Mahindra rose 0.90%, while NTPC, Larsen & Toubro and Bajaj Finance added 0.62%, 0.54% and 0.54%, respectively.
Sun Pharma and Asian Paints gained 0.42% each, while M&M rose 0.34%. Bharti Airtel and Hindustan Unilever were also marginally higher.
On the other hand, UltraTech Cement was the biggest laggard, falling 1.68%. Titan declined 1.34%, while Reliance Industries fell 0.97%. Infosys, Power Grid and ICICI Bank were also among the major losers.
MOST SECTORS TRADE LOWER
The sectoral picture remained weak in early trade. Nifty Media was the biggest gainer, rising 0.55%, while Nifty Auto advanced 0.29%. Nifty Midcap IT & Telecom gained 0.37% and Nifty Chemicals rose 0.26%.
On the losing side, Nifty Pharma fell 0.50%, Nifty Oil & Gas declined 0.50% and Nifty IT slipped 0.41%. Nifty Metal fell 0.41%, while Nifty PSU Bank declined 0.60%. Nifty Financial Services 25/50, Nifty Private Bank and Nifty Realty were also in the red.
The Nifty Healthcare index declined 0.24%, while Nifty Consumer Durables fell 0.47%. Nifty Financial Services ex-Bank and Nifty Midcap Financial Services were down 0.14% and 0.19%, respectively.
With crude oil still elevated, investors are likely to remain focused on oil prices and their impact on inflation and corporate earnings. At the same time, strong domestic growth, earnings momentum and continued liquidity flows could provide some support to the market during the consolidation phase.
