Mumbai, Aug 31: Indian stock markets opened lower on Monday as investors turned cautious amid rising crude oil prices, weak Asian markets and renewed tensions in the Middle East.
The Sensex opened at 77,130.73, down 133.78 points, or 0.17 per cent, while the Nifty slipped 58.10 points, or 0.24 per cent, to 24,117.55.
The decline was broad-based, with metal and technology stocks facing the strongest selling pressure. The Nifty Metal index fell 1.70 per cent, making it the worst-performing sector in early trade, while the Nifty IT index dropped 1.32 per cent.
Nifty Media and Nifty PSU Bank also declined by up to 1 per cent. Realty, cement, chemicals and FMCG stocks were among the other sectors trading lower, with losses ranging between 0.73 per cent and 1 per cent.
The Nifty Private Bank index was one of the few sectoral indices to remain in positive territory, edging up 0.06 per cent.
Global developments continued to influence investor sentiment. Market analysts said concerns over the US Federal Reserve’s interest-rate outlook have resurfaced following comments from Fed chief Kevin Warsh on the need to address inflation if it remains above the central bank’s long-term target.
The comments have raised expectations that the US Federal Reserve could maintain a tight monetary policy stance, with investors now closely watching the upcoming September 15-16 FOMC meeting. Any increase in bond yields could put further pressure on equity markets.
Rising crude oil prices added another layer of concern for Indian investors. Brent crude moved above the $90-a-barrel mark after renewed tensions between the US and Iran. Brent crude was up more than 2 per cent at $90.67 a barrel, while US WTI crude gained 2.06 per cent to $85.09 a barrel.
Higher oil prices are particularly important for India because of its dependence on crude imports. A prolonged rise in energy costs could increase pressure on inflation, corporate margins and the country’s import bill.
HDFC Bank is also expected to remain in focus amid market speculation over the next chief executive officer following Sasidhar Jagadishan. The developments could lead to increased volatility in the stock.
Despite the weak opening, analysts believe the broader market could continue to see strong activity as investors increasingly favour companies with solid growth prospects.
Technically, the Nifty continues to trade within a consolidation range. Analysts see 24,060 as an important support level, while a sustained move above 24,215 could signal renewed upward momentum. A break below 24,060, on the other hand, could expose the index to levels around 23,575.
Investors are also preparing for potentially higher volatility as changes related to the MSCI index rejig come into effect under the new closing auction system.
Asian markets were largely weak in early trade. Japan’s Nikkei fell more than 1 per cent, Hong Kong’s Hang Seng declined 0.7 per cent, while South Korea’s KOSPI slipped more than 1 per cent.
For domestic investors, the direction of crude oil prices, global interest-rate expectations and geopolitical developments are likely to remain the key factors influencing market sentiment in the near term.