Sensex, Nifty extend losses as Middle East tensions push oil past $95

The BSE Sensex fell 314.62 points, or 0.41%, to 76,440.43, while the NSE Nifty50 slipped 82.50 points, or 0.34%, to 23,913.75 around 9:30 am.

In Short

• Brent crude crossed $96 amid Middle East tensions
• Dr Reddy's and HPCL posted weak June-quarter results
• IT, Pharma, Realty sectors declined with private banks weak

Benchmark stock market indices opened lower on Thursday as Brent crude oil climbed above $96 a barrel, intensifying concerns over inflation and India's import bill amid escalating tensions in the Middle East. Weak June-quarter earnings from Dr Reddy's Laboratories and HPCL also weighed on investor sentiment.

The BSE Sensex fell 314.62 points, or 0.41%, to 76,440.43, while the NSE Nifty50 slipped 82.50 points, or 0.34%, to 23,913.75 around 9:30 am.

The weakness came after fresh US strikes on Iran and attacks by Yemen's Houthi rebels on oil tankers in the Red Sea, pushing crude oil prices to their highest levels in more than a month.

CRUDE OIL SURGES ABOVE $96

Brent crude rose 2.32% to $96.25 per barrel, while WTI crude gained 1.92% to $88.50, extending gains after geopolitical tensions heightened fears of supply disruptions.

Higher crude prices are a major concern for India, the world's third-largest importer and consumer of crude oil, as they can fuel inflation, widen the current account deficit, weaken the rupee and squeeze corporate margins.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the latest developments in West Asia have worsened the market outlook.

"The Houthi's aggressive entry into the Iran-US conflict by attacking Saudi Arabian tankers in the Red Sea is aggravating the West Asia crisis and pushing Brent crude higher. When Brent crude trades above $95, which is the price now, it is bound to have sentimental impact on the Indian market. India's vulnerability to high oil prices is once again becoming a macro concern," he said.

DR REDDY'S, HPCL RESULTS WEIGH

Apart from geopolitical concerns, disappointing earnings from Dr Reddy's Laboratories and Hindustan Petroleum Corporation Ltd (HPCL) also hurt market sentiment.

Dr Reddy's shares dropped around 4% after its June-quarter results, while HPCL fell about 5% following its earnings announcement, adding pressure on the benchmark indices.

Among Sensex stocks, Infosys emerged as the top loser, falling 1.43%, followed by Bajaj Finance (-0.96%), HDFC Bank (-0.80%), SBI (-0.71%), NTPC (-0.67%), Reliance Industries (-0.62%), Tata Steel (-0.56%) and Tech Mahindra (-0.53%).

On the positive side, Eternal gained 0.65%, Trent rose 0.52%, M&M added 0.17% and Cement traded marginally higher.

IT, PHARMA, REALTY UNDER PRESSURE

Sectorally, Nifty Pharma declined 0.72%, Nifty IT fell 0.68% and Nifty Realty slipped 0.71%.

Private banks remained weak, with the Nifty Private Bank index falling 0.39%, while the PSU Bank index lost 0.37%. Nifty Financial Services also traded 0.22% lower.

The broader market also remained under pressure. The Nifty Smallcap 100 fell 0.19%, Nifty Midcap 100 slipped 0.27% and the Nifty Midcap 50 declined 0.31%, while the Nifty 500 was down 0.26%.

Among the few gainers, the Nifty Metal index rose 0.44%, followed by Nifty Auto (+0.19%) and Nifty Media (+0.09%). Consumer Durables also traded marginally higher.

India VIX edged up 0.09% to 13.31, indicating that market volatility remained elevated.

Vijayakumar believes the current weakness could present opportunities for long-term investors.

"From the market perspective, this negative sentiment will weigh on stock markets and keep stock prices largely subdued. This will give opportunities to long-term investors to slowly accumulate high-quality stocks in growth segments, now available at attractive valuations. Banking stocks appear attractively valued, particularly in the context of high credit growth and very low NPAs. Q1 results of consumer-facing digital companies reflect robust growth, indicating bright prospects," he said.

(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.)

- Ends