Equity markets opened lower on Tuesday as investors remained cautious over escalating tensions in the Middle East, the impact of fresh US sanctions on Iran and elevated crude oil prices. The caution also comes ahead of the monthly expiry of Nifty 50 derivatives contracts.
By 9:43 am, the BSE Sensex was down 116.44 points, or 0.15%, at 77,252.67, while the Nifty 50 had fallen 59.60 points, or 0.25%, to 24,159.45. The Sensex opened at 77,295.49 and has moved between 77,146.03 and 77,390.72 so far. The Nifty opened at 24,175.75 and touched an early high of 24,198.25 and a low of 24,128.85.
Fourteen of the 16 major Nifty sectoral indices were in the red, pointing to broad-based caution at the start of trade. Nifty IT fell 0.53%, Nifty Auto declined 0.44%, Nifty Realty dropped 0.41% and Nifty FMCG slipped 0.34%. Nifty Oil & Gas fell 0.35%, while Nifty Financial Services 25/50 and Nifty Private Bank were both down 0.14% and 0.08%, respectively.
Nifty Metal also declined 0.67%, while Nifty Pharma fell 0.08%. Nifty Healthcare was down 0.12% and Nifty Consumer Durables declined 0.27%. On the other hand, Nifty Media gained 0.32%, while Nifty PSU Bank added 0.14%. Nifty Financial Services ex-Bank rose 0.03%, Nifty MidSmall Financial Services gained 0.42% and Nifty MidSmall IT & Telecom added 0.25%.
Dr V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, expects the market to remain range-bound in the near term, with buying emerging at lower levels and selling at higher levels.
He sees the immediate Nifty range at 24,100-24,500, but said the bulk of market activity is likely to remain beyond the benchmark, particularly in the mid-cap and small-cap segments.
“The U.S. sanctions on Iran and the threat of secondary sanctions on countries that trade with Iran have introduced a new wave of uncertainty,” Vijayakumar said, adding that crude is likely to remain at elevated levels, which could constrain a sustained market rally.
MID- AND SMALL-CAPS REMAIN RELATIVELY RESILIENT
The broader market was holding up better than the frontline indices. The Nifty Midcap 50 was marginally higher and Nifty Midcap 100 gained 0.03%, while the Nifty Smallcap 100 slipped 0.05%. Nifty 100 fell 0.24%, Nifty 200 declined 0.19% and Nifty 500 was down 0.16%.
Vijayakumar said there was “hectic activity” in the broader market, with positive corporate news attracting strong buying. He noted that both retail investors and FIIs were participating in this momentum despite elevated valuations.
Among Sensex stocks, Trent was the biggest gainer, rising 0.52%, followed by BEL, which added 0.37%, and Adani Ports, which gained 0.35%. Eternal rose 0.20%, Titan added 0.17% and ICICI Bank gained 0.15%.
At the other end, HCLTech was the biggest loser, falling 1.09%. Tech Mahindra declined 0.73%, Bajaj Finance fell 0.64%, Maruti dropped 0.63%, Bajaj Finserv slipped 0.64% and NTPC declined 0.52%. Tata Steel, Power Grid and Reliance were also trading lower.
CRUDE REMAINS A KEY MARKET TRIGGER
Oil prices remained elevated, with WTI crude trading at $85.44 a barrel, up 0.51%, while Brent crude stood at $92.51, up 0.37%. The sustained elevation in crude prices remains a concern for India given the country’s dependence on imported oil.
The latest pressure comes after Iran vowed to retaliate against expanded US economic sanctions that Washington said would cut off Tehran’s economic lifeline. With concerns over Iranian oil supplies and tensions around the Strait of Hormuz still high, investors remain wary of another spike in energy prices.
Vijayakumar said the uncertainty around sanctions and crude prices is likely to keep the market’s range-bound nature intact, even as the broader market continues to attract momentum-driven buying. He cautioned investors, however, that the broader-market rally should not be chased at any price given the importance of valuations.
