Benchmark equity indices opened lower on Thursday as rising crude oil prices and disappointing quarterly earnings from major companies dampened investor sentiment. Escalating geopolitical tensions in West Asia pushed Brent crude above $96 per barrel, raising concerns over inflation and India’s import bill.

Around 9.30 am, the BSE Sensex was down 314.62 points, or 0.41 per cent, at 76,440.43, while the NSE Nifty50 fell 82.50 points, or 0.34 per cent, to 23,913.75.

Crude Oil Rally Raises Macro Concerns

Brent crude rose 2.32 per cent to $96.25 per barrel, while West Texas Intermediate (WTI) crude gained 1.92 per cent to $88.50 after fresh US strikes on Iran and attacks by Yemen’s Houthi rebels on oil tankers in the Red Sea fuelled fears of supply disruptions.

Higher crude prices are seen as a key concern for India, which imports the majority of its crude oil requirements. Rising oil prices can increase inflationary pressures, widen the current account deficit, weaken the rupee and raise input costs for businesses.

Dr V. K. Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the developments in West Asia had 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.

Weak Earnings Add to Selling Pressure

Investor sentiment was also affected by weaker-than-expected June-quarter earnings from Dr Reddy’s Laboratories and Hindustan Petroleum Corporation Ltd (HPCL).

Shares of Dr Reddy’s fell around 4 per cent after the company announced its quarterly results, while HPCL declined about 5 per cent following its earnings announcement.

Among Sensex constituents, Infosys was the biggest loser, falling 1.43 per cent. Bajaj Finance, HDFC Bank, State Bank of India, NTPC, Reliance Industries, Tata Steel and Tech Mahindra also traded lower.

On the positive side, Eternal gained 0.65 per cent, Trent rose 0.52 per cent, while Mahindra & Mahindra advanced 0.17 per cent. UltraTech Cement also traded marginally higher.

Pharma, IT and Realty Stocks Decline

Sectorally, Nifty Pharma fell 0.72 per cent, Nifty IT declined 0.68 per cent and Nifty Realty slipped 0.71 per cent in early trade.

Banking stocks also remained under pressure, with the Nifty Private Bank index falling 0.39 per cent and the PSU Bank index declining 0.37 per cent. Nifty Financial Services was down 0.22 per cent.

The broader market mirrored the weakness, with the Nifty Smallcap 100 falling 0.19 per cent, the Nifty Midcap 100 declining 0.27 per cent and the Nifty Midcap 50 losing 0.31 per cent. The Nifty 500 index also traded 0.26 per cent lower.

Among sectoral gainers, the Nifty Metal index rose 0.44 per cent, followed by Nifty Auto, which gained 0.19 per cent, and Nifty Media, up 0.09 per cent. Consumer Durables also traded slightly higher.

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

Analysts See Buying Opportunities

Despite the near-term weakness, Vijayakumar said the correction could offer attractive entry points 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.

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