Sensex, Nifty open higher despite crude above $100; IT drags, auto and pharma gain

The BSE Sensex opened at 74,535.18 and was trading at 74,733.96 at 9:37 am, up 439 points or 0.59% from the previous close. The Nifty 50 opened at 23,330.20 and was at 23,393.10, gaining 46.70 points or 0.20%

In Short

• Benchmark indices opened higher, recovering from recent losses
• IT stocks fell, while auto, pharma and FMCG sectors gained
• Investors watch Iran-US conflict, crude prices and NSE IPO closely

Benchmark indices opened higher on Monday, recovering from their recent losses despite continued geopolitical risks and crude oil prices remaining above the $100-a-barrel mark. Bargain buying in select large-cap stocks and a decline in oil prices supported the opening, while IT stocks remained under pressure.

The BSE Sensex opened at 74,535.18 and was trading at 74,733.96 at 9:37 am, up 439 points or 0.59% from the previous close. The Nifty 50 opened at 23,330.20 and was at 23,393.10, gaining 46.70 points or 0.20%.

The opening rebound comes after both benchmarks recorded their sixth straight weekly decline last week, their longest losing streak in six years.

IT STOCKS DRAG, AUTO AND PHARMA GAIN

The sectoral picture was largely positive at the open. Nifty Pharma gained 1.11%, Nifty FMCG rose 1.06%, Nifty Healthcare advanced 0.97% and Nifty Realty gained 0.63%.

Nifty Auto rose 0.41%, Nifty Financial Services 25/50 gained 0.34%, Nifty Private Bank advanced 0.36% and Nifty Media rose 0.30%.

Nifty IT was the key laggard, falling 1.05%. Nifty MidSmall IT & Telecom also declined 0.82%.

Nifty Metal slipped 0.06%, Nifty PSU Bank fell 0.29% and Nifty Financial Services Ex-Bank declined 0.22%.

ULTRATECH, ASIAN PAINTS LEAD GAINS

UltraTech Cement was the top Sensex gainer, rising 3.60%, followed by Asian Paints at 2.37% and Sun Pharma at 2.06%.

IndiGo gained 1.83%, Trent rose 1.65% and HCLTech advanced 1.50%. ITC gained 1.30%, Hindustan Unilever rose 1.27% and NTPC advanced 1.10%.

HDFC Bank rose 0.97%, Kotak Mahindra Bank gained 0.88%, Titan advanced 0.87% and M&M rose 0.84%.

On the losing side, Infosys fell 1.82%, Adani Ports declined 1.34%, Power Grid dropped 0.93% and Bharti Airtel fell 0.91%. Tech Mahindra was down 0.04%.

The broader market was largely steady. Nifty 100 gained 0.21%, Nifty 200 rose 0.13% and Nifty 500 advanced 0.11%.

Nifty Smallcap 100 gained 0.07%, while Nifty Midcap 50 fell 0.03% and Nifty Midcap 100 declined 0.20%.

India VIX rose 1.84% to 11.60, indicating some increase in expected market volatility.

CRUDE OIL EASES BUT REMAINS ABOVE $100

Crude oil prices fell more than 2% at the start of the week. WTI crude was at $98.12, down 2.17%, while Brent crude stood at $101.62, also down 2.17%.

The decline in oil prices offered some relief to Indian equities, but Brent remains above $100 a barrel amid continuing geopolitical tensions in the Middle East.

Iran and the US exchanged fresh threats on Sunday, raising concerns over a further escalation of the conflict and its impact on global energy supplies.

The primary market will also remain in focus as the Rs 2.3-billion NSE IPO is scheduled to close for subscription later today.

The IPO has already attracted strong investor demand, continuing the recent rush towards new issues. The heavy IPO pipeline remains a factor for the secondary market as investors allocate money towards primary-market opportunities.

Dr V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said global geopolitical risks are increasing, but easing crude prices are providing some relief to equity markets.

"Global geopolitical risks are increasing. The conflicts in the Middle East and the Russia-Ukraine war are escalating. However, Brent crude has declined to below $102 thanks to the increasing oil flow through the Strait of Hormuz," Vijayakumar said.

He said the US 10-year bond yield, which remains around 5%, continues to pose a risk to equities, although robust economic growth and expectations of strong corporate earnings are helping markets hold up.

"In India, too, this pattern is playing out. GDP growth of 7% and Nifty earnings growth of 12 to 14% are achievable in FY27. The broader market earnings growth will be much better," he said.

Vijayakumar added that a sectoral shift towards large-caps could take place once the Iran-US conflict is resolved and crude oil prices and bond yields decline.

"For now, investors should wait for this pivot and, meanwhile, accumulate high quality large-caps available at attractive valuations," he said.

For Monday's session, investors will therefore track crude oil prices, developments in the Iran-US conflict, FII flows and the NSE IPO, while the recent six-week market decline keeps bargain buying in focus.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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