The Indian stock markets witnessed a decline in early trade on Monday, with benchmark indices Sensex and Nifty dipping due to a surge in crude oil prices. This spike stems from rising geopolitical uncertainties surrounding global oil supply.
The 30-share BSE Sensex fell 19.38 points, reaching 78,479.79, while the 50-share NSE Nifty skidded 5.10 points to 24,567.45 in initial trades. As the session progressed, both indices continued to struggle; the Sensex decreased by 158.62 points to settle at 78,340.55, and the Nifty dropped by 45.20 points, reaching 24,524.95.
Among the companies listed on the Sensex, stocks such as Eternal, State Bank of India, InterGlobe Aviation, Power Grid, NTPC, and Bharti Airtel faced losses. In contrast, Titan, Infosys, Tech Mahindra, and HCL Tech posted gains.
As for crude oil, Brent crude, the global benchmark, traded up by 1.03% at USD 84.41 per barrel. Rajesh Palviya, Head of Research at Axis Direct, highlighted the impact of elevated crude prices: “Elevated crude prices remain a key risk. Brent crude has risen for the third consecutive session to around USD 84.4 a barrel after Iran indicated no immediate reopening of the Strait of Hormuz, while weekend attacks on Gulf shipping have kept the geopolitical risk premium elevated.”
Despite these challenges, Foreign Institutional Investors (FIIs) demonstrated optimism by purchasing equities worth Rs 480.24 crore on Friday, according to exchange data. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, remarked, “The undertone of the market is mildly bullish. The principal bullish factor is the better-than-expected Q1 results. With the earnings season coming to an end this week, the vast majority of companies have reported earnings growth that has beaten expectations.”
According to Vijayakumar, the consistent buying by FIIs through July and August indicates positive investor sentiment.
Taking a look at Asian markets, South Korea’s KOSPI, Japan’s Nikkei 225 index, Shanghai’s SSE Composite index, and Hong Kong’s Hang Seng index all recorded increases, hinting at regional market resilience. In the US, markets closed on a positive note on Friday, further buoying investor sentiment.
Ponmudi R, CEO of Enrich Money, noted, “Asian markets are trading higher in early trade, with Japan’s Nikkei 225 and South Korea’s Kospi each advancing more than 1 per cent, providing a constructive backdrop for regional equities.”
On the previous Friday, the Sensex recorded a substantial drop of 455.59 points, or 0.58%, settling at 78,499.17 points, while the Nifty experienced a decline of 65.35 points, or 0.27%, ending at 24,570.65 points.
