Mumbai, Sep 11: Indian equity markets opened lower on Friday as rising crude oil prices, weak global cues and renewed geopolitical tensions weighed on investor sentiment.
The Sensex fell nearly 600 points, or 0.79 per cent, to 74,309.16 at the opening, while the Nifty 50 declined 207.50 points, or 0.88 per cent, to 23,270.30. The broader market also remained under pressure, reflecting cautious investor sentiment.
Selling was particularly strong in metal and realty stocks. The Nifty Metal index declined more than 3 per cent, while Nifty Realty dropped over 2 per cent. Consumer durables, financial services, banking, auto and cement stocks also traded lower.
The pressure on Indian markets was largely linked to the sharp rise in crude oil prices amid escalating tensions in the Middle East. Higher oil prices are a concern for India because the country depends significantly on imports to meet its energy requirements. A sustained rise in crude prices could increase the import bill, add to inflationary pressures and raise input costs for several businesses.
Oil-sensitive sectors such as aviation, paints and other industries that depend heavily on petroleum-based inputs could face higher operating costs. On the other hand, domestic upstream oil producers could benefit from stronger crude prices.
Global bond yields are adding to the pressure on equities. The US 10-year Treasury yield was close to the 5 per cent level, raising concerns about tighter financial conditions and keeping investors cautious about riskier assets.
Asian markets also traded lower after the rise in oil prices contributed to a sell-off on Wall Street. Higher energy prices, inflation concerns and expectations around US monetary policy have increased uncertainty for global investors.
The Indian rupee also remained under pressure, closing at around Rs 95.44 against the US dollar in the previous session. A weaker rupee combined with higher crude prices could further increase the cost of imported goods and energy, potentially adding to domestic inflation.
Despite the weak opening, continued buying by domestic institutional investors could provide some support to the market. Domestic institutions had purchased equities worth Rs 1,026 crore in the previous session, partly cushioning the impact of foreign portfolio investor selling.
From a technical perspective, the Nifty may find support around the 23,260-23,000 range, while 23,520 remains an important level on the upside. Investors are likely to closely monitor crude oil prices, US inflation data, bond yields and developments in the Middle East for further market direction.
Overall, the near-term market environment remains cautious. Elevated energy prices and global uncertainty could continue to create volatility, although strong domestic institutional participation and underlying domestic economic activity may help limit the downside.
