Equity benchmarks opened lower on Wednesday as elevated crude oil prices and uncertainty over the Middle East conflict continued to weigh on investor sentiment. Rising global bond yields also added to pressure on risk assets, keeping the market cautious after six straight sessions of losses for the Nifty 50.
The BSE Sensex was down 117.94 points, or 0.15%, at 77,117.52, while the Nifty 50 fell 44 points, or 0.18%, to 24,110.90 as of 9:25 am. The Sensex opened at 77,218.05, while the Nifty opened at 24,152.05.
The Nifty has now declined for six consecutive sessions, losing around 1.7% during the losing streak.
CRUDE OIL REMAINS A KEY CONCERN
Brent crude was trading at $91.58 a barrel, up 0.62%, while WTI crude was at $85.55, up 0.72%. Investors remain concerned that the prolonged uncertainty around the Middle East could keep oil prices elevated.
US President Donald Trump said on Tuesday that no talks were taking place with Iran and insisted that the Strait of Hormuz was open, contradicting Iran’s assertion that the critical waterway remained shut to shipping.
The lack of clarity over a possible resolution to the conflict has kept energy markets on edge, with rising crude prices raising concerns about inflation and India’s import bill.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the ongoing weakness in the market was being driven mainly by rising crude prices and appreciating bond yields globally.
“Crude prices have been responding to news from the Middle East for many months since the start of the war. Now, there is total uncertainty about the outcome of this conflict. Crude prices are rising anticipating the continuation of the uncertainty,” Vijayakumar said.
GLOBAL BOND YIELDS ADD TO MARKET PRESSURE
Rising bond yields are another concern for equities. Vijayakumar said fears of higher inflation were pushing bond yields higher, with US 30-year yields at their highest levels since 2007.
“Yet, the Indian market has not corrected sharply since the fundamentals are strong and getting stronger,” he said, pointing to improving prospects for GDP and earnings growth in FY27 as well as strong domestic liquidity.
He added that long-term investors could use the ongoing weakness to accumulate quality growth stocks, while market momentum remains stronger in the mid- and small-cap segments.
IT STOCKS UNDER PRESSURE
IT stocks were among the major drags at the open. The Nifty IT index was down 0.54%, with most large IT stocks trading lower.
Infosys fell 0.78%, HCLTech declined 0.92%, TCS slipped 0.94% and Tech Mahindra lost 1.09%. Wipro was also under pressure, while ITC was among the few IT-related names in the Sensex pack to trade higher, gaining 0.30%.
SENSEX GAINERS AND LOSERS
Eternal was the top Sensex gainer, rising 0.95%, while HCLTech gained 0.92%. Sun Pharma and Infosys rose 0.78% each, while NTPC gained 0.46% and Trent advanced 0.41%.
On the losing side, Asian Paints fell 1.59%, Infosys was down 1.54%, HCLTech declined 1.39% and Tech Mahindra lost 1.21%. Tata Steel fell 0.94%, M&M declined 0.88% and Bajaj Finance slipped 0.75%.
TCS was down 0.35%, while Reliance Industries fell 0.24% and Axis Bank declined 0.25%.
MOST SECTORS TRADE LOWER
The sectoral picture was mixed but tilted towards weakness. Nifty IT fell 0.54%, while Nifty Realty declined 0.35% and Nifty Auto dropped 0.35%. Nifty Financial Services 25/50 fell 0.30%, while Nifty Financial Services ex-Bank declined 0.28%.
Nifty Metal was down 0.62%, Nifty Chemicals fell 0.46% and Nifty Midcap Financial Services declined 0.16%.
On the positive side, Nifty FMCG rose 0.42%, while Nifty Midcap IT & Telecom gained 0.42%. Nifty Pharma was up 0.13%, Nifty Oil & Gas gained 0.15% and Nifty Healthcare rose marginally.
BROADER MARKET ALSO UNDER PRESSURE
The broader market was also mostly lower. Nifty 100 fell 0.19%, Nifty 200 declined 0.25% and Nifty 500 slipped 0.21%.
The Nifty Midcap 50 and Nifty Midcap 100 fell 0.43% and 0.47%, respectively, while the Nifty Smallcap 100 was marginally higher at 0.04%.
India VIX rose 0.52% to 11.39, reflecting some increase in market caution.
Vijayakumar said the Indian market remained resilient despite global pressures because of strong domestic fundamentals and abundant liquidity. However, he cautioned that uncertainty around crude and global bond yields could keep equities volatile in the near term.
