Indian equity markets signalled a weak start in Thursday’s pre-open session, extending the cautious tone seen in the previous trading day as investors reacted to rising crude oil prices, geopolitical tensions in West Asia and continued foreign fund outflows.
The BSE Sensex started the session around 76k, crashing more than 800 points, while the NSE Nifty50 opened trading near 23,650, tanking a little over 200 points, as of 9:15 AM.
The muted start follows a sharp sell-off in the previous session when escalating geopolitical tensions and a surge in crude oil prices unsettled investor sentiment.
On the 30-share Sensex, Tech M, Reliance, and HCL Tech emerged among the only gainers in the session. On the other hand, the laggards were dominated by Eternal, IndiGo, M&M, Titan, and L&T.
In the broader markets, the Nifty Microcap250 led with losses of 1.91 per cent. Sectorally, all the indices traded in red, with the Auto index standing out with a decline of 2.65 per cent.
At around 9:03 AM in the pre-open hour, the Sensex was quoted at 76,549.31, down 314.40 points or 0.41 per cent. The NSE benchmark stood at 23,685.10, lower by 183.15 points or 0.77 per cent, indicating a gap-down opening for domestic benchmarks.
Crude Oil Surge Adds To Market Worries
Investor anxiety intensified after crude oil prices surged sharply amid the worsening geopolitical crisis in West Asia. Brent crude, the global oil benchmark, climbed 8.98 per cent to $100.24 per barrel.
Higher crude prices are typically seen as a negative for India’s economy as the country depends heavily on imported oil. A sustained rise in oil prices can increase inflationary pressures and widen the current account deficit.
Global Cues Remain Weak
Global markets also offered little support to domestic equities. Major Asian indices including South Korea’s Kospi, Japan’s Nikkei 225, China’s Shanghai Composite and Hong Kong’s Hang Seng were trading lower.
Wall Street had ended mostly in negative territory in the previous session on Wednesday.
Persistent FII Selling Weighs On Sentiment
Foreign Institutional Investors continued to remain net sellers in the Indian market. According to exchange data, FIIs offloaded equities worth Rs 6,267.31 crore on Wednesday.
Domestic Institutional Investors, however, remained buyers and purchased shares worth Rs 4,965.53 crore in the same session.
“External headwinds have pushed the market into a weak zone. With the war continuing to rage with no signs of let up and Brent crude again bouncing back to $100 levels, the weakness is likely to persist. Even though DIIs are continuously buying in the market, DII buying is not helping the market to recover since FIIs are sustained sellers and show no signs of reversing their strategy in this uncertain global environment,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
Markets Slide Nearly 2 Per Cent In Previous Session
Benchmark indices Sensex and Nifty ended Wednesday’s trade sharply lower, retreating after a brief recovery in the earlier session. The fall was triggered by a spike in global crude oil prices and persistent foreign institutional investor selling.
The Sensex plunged 1,342.27 points, or 1.72 per cent, to close at 76,863.71. During the session, the index dropped as much as 1,446.72 points, or 1.84 per cent, to touch an intra-day low of 76,759.26.
The Nifty declined 394.75 points, or 1.63 per cent, to settle at 23,866.85.
Market breadth remained negative on the BSE, where 2,380 stocks declined, while 1,881 advanced and 153 remained unchanged.