Mumbai, Sep 1: Indian benchmark equity indices opened marginally lower on Tuesday as rising crude oil prices and renewed geopolitical concerns weighed on investor sentiment, despite strong domestic economic growth data.
The BSE Sensex fell around 0.1% to 76,884.91, while the Nifty 50 declined 0.17% to 24,039.75 in early trade. Banking stocks came under pressure, with the banking index falling around 1%, while small- and mid-cap stocks also traded lower.
Investor sentiment remained cautious amid a rise in crude oil prices following renewed tensions between the United States and Iran. International oil prices crossed the $90-a-barrel mark, raising concerns over possible disruptions to global energy supplies, particularly around the Strait of Hormuz.
Higher crude prices are a key concern for India, which depends heavily on imports to meet its oil requirements. A sustained increase in crude prices could put pressure on inflation, the current account balance and the Indian rupee, while raising input costs for several oil-sensitive sectors.
Global markets also remained cautious as higher energy prices revived concerns about inflation and interest rates. Rising bond yields in major economies added to pressure on risk assets and kept investors wary.
The domestic economy, however, continued to provide some support to the market. India’s economy grew 7.8% year-on-year in the April-June quarter, beating market expectations and reflecting strength in investment, manufacturing and consumer demand.
Despite the strong growth figures, investors remained focused on external risks, including crude oil prices, geopolitical developments, global interest-rate expectations and foreign fund flows.
Market participants are expected to closely monitor developments in the Middle East and movements in crude oil prices for further direction. Continued geopolitical tensions and elevated oil prices could keep Indian equities volatile, while strong domestic economic growth may provide some cushion to the market.
Indian equities are likely to remain sensitive to global cues in the near term as investors weigh strong domestic fundamentals against rising external risks.