Benchmark indices opened lower on Tuesday as firmer crude oil prices weighed on investor sentiment, although strength in IT stocks and continued foreign buying provided some support. Investors are also tracking corporate earnings, which have so far remained largely resilient.
The BSE Sensex opened at 78,509.77 but was down 315.36 points, or 0.40%, at 78,227.08 as of 9:26 am. The Nifty 50 was down 94.05 points, or 0.38%, at 24,489.75 after opening at 24,575.10.
HIGHER CRUDE OIL REMAINS A KEY CONCERN
Crude oil prices remained elevated, keeping pressure on the market. Brent crude was around $87.71 a barrel, while WTI crude was at $82.13 in early trade.
Higher oil prices are a concern for India because the country is a major crude importer. A sustained rise in oil prices can increase the import bill and add to inflationary pressure, while also affecting corporate margins.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said rising Brent crude remains an irritant for the market even as other fundamentals remain strong.
“A significant pivot in the market is the FIIs turning buyers encouraged by the better-than-expected Q1 results and stability in the rupee. These positives have the potential to keep the market resilient with a slight upward bias,” Vijayakumar said.
He added that robust domestic consumption could support earnings growth through FY27.
IT STOCKS BUCK THE MARKET TREND
IT stocks were among the key gainers in early trade, helping limit the broader market’s decline.
HCLTech was the top gainer among the major stocks, rising 1.13%. Titan and Tech Mahindra gained 0.72% each, while Infosys rose 0.57% and TCS advanced 0.52%.
The Nifty IT index was up 0.74% in early trade.
The IT sector has been closely watched after a series of quarterly results, with investors looking for signs of a recovery in global technology spending.
At the same time, the market remains sensitive to global technology trends and the outlook for IT spending.
BANKING, FINANCIAL STOCKS DRAG
Financial stocks were among the key drags on the benchmarks.
The Nifty Private Bank index fell 0.72%, while Nifty Financial Services 25/50 declined 0.58%. The Nifty PSU Bank index was down 0.42%.
Among individual stocks, Axis Bank fell 1.12%, Bajaj Finance declined 1.20%, Bajaj Finserv lost 0.25% and HDFC Bank was down 0.42%.
IndiGo was the biggest loser among the major stocks, falling 1.75%. UltraTech Cement declined 1.13%, while Bharti Airtel, Adani Ports and Reliance Industries also traded lower.
BROADER MARKET SHOWS MIXED TREND
The broader market was mixed in early trade. The Nifty Smallcap 100 was up 0.42%, while the Nifty Midcap 50 and Nifty Midcap 100 were both down 0.22%.
The Nifty 100 fell 0.32%, Nifty 200 declined 0.30% and Nifty 500 was down 0.22%.
Among sectoral indices, Nifty IT gained 0.74%, Nifty Consumer Durables rose 0.46% and Nifty Realty was up 0.07%.
Nifty Auto and Nifty Oil & Gas were almost flat, gaining 0.04% each. On the other hand, Nifty Private Bank fell 0.72%, Nifty Financial Services 25/50 declined 0.58% and Nifty FMCG lost 0.35%.
FIIS TURNING BUYERS PROVIDES SUPPORT
Despite the pressure from crude oil, foreign institutional buying has emerged as an important positive for Indian equities.
Vijayakumar said FIIs have been turning buyers, encouraged by better-than-expected Q1 results and stability in the rupee.
He also pointed to a shift in global capital away from the “chip trade” in South Korea and Taiwan. According to him, FIIs are compensating for under-ownership in Indian stocks and this trend could continue.
“Big FCNR (B) inflows can support the rupee, which, in turn, can facilitate more FII inflows,” he said.
He added that FIIs are currently investing in sectors such as telecom, renewable energy, capital goods and pharmaceuticals, even where valuations are high, rather than in attractively valued banking majors.
For the market, the immediate balance remains between elevated crude oil prices on one side and strong corporate earnings, domestic consumption and renewed FII buying on the other.
