Sensex falls 593 points, Nifty down 0.88% as crude oil prices hit four-month high

Mumbai: Indian benchmark equity indices opened sharply lower on Friday as escalating tensions in West Asia pushed crude oil prices higher, raising concerns over the impact of rising energy costs on India's economic growth and corporate earnings.

The Nifty 50 opened at 23,270.30, down 207.50 points, or 0.88 per cent, while the BSE Sensex opened at 74,309.16, lower by 593.43 points, or 0.79 per cent.

Brent crude was trading at around USD 108.27 per barrel at the time of reporting, adding to concerns for oil-importing economies such as India.

The escalation in West Asia has entered a critical phase, with the conflict developing into a direct confrontation involving the United States and Iran. The situation has disrupted global energy corridors and triggered regional military mobilisation, putting further pressure on crude prices.

V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the market was facing stronger headwinds as geopolitical tensions intensified and crude prices climbed.

“Headwinds for the market are getting stronger with the escalation in the Middle East conflict. Brent crude has shot up to around USD 108. If this high price sustains, or worse, spikes further, the impact on India’s GDP growth and consequently on corporate earnings will not be insignificant,” Vijayakumar said.

He also identified rising US bond yields as another major concern for global equities.

“An equally strong headwind is the rise in U.S. bond yields. The 10-year yield, now at 4.96 per cent, is approaching the 5 per cent mark, which many regard as a possible inflection point for global equities,” he said.

Vijayakumar said a correction in global equity markets was likely, although the timing remained difficult to predict.
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IPO market draws investor interest

On the domestic market, Vijayakumar said India's booming IPO market had emerged as a major attraction for investors, with heavy oversubscription and strong listing gains drawing large numbers of participants.

He also pointed to investor interest in the upcoming NSE IPO, which is scheduled to open for public subscription on September 17.

Selling pressure was visible across almost all major sectors at the opening.

The Nifty Metal index was the biggest laggard, falling 2.46 per cent, followed by Nifty Realty, which declined 1.75 per cent. Nifty PSU Bank fell 1.38 per cent, while Nifty Auto dropped 1.26 per cent and Nifty Private Bank declined 1.10 per cent.

The Nifty FMCG index fell 0.78 per cent, while Nifty IT was down 0.20 per cent.
Also read | US inflation, crude oil, Iran conflict to drive gold and silver prices this week

Asian markets also under pressure

Other Asian markets were largely lower on Friday.

Japan's Nikkei 225 fell 2.90 per cent to 63,381, while South Korea's KOSPI declined 2.44 per cent to 6,862.22. Taiwan Weighted dropped 1.91 per cent to 46,045.83, while the Shanghai Composite fell 1.82 per cent to 3,862.73.

Hong Kong's Hang Seng declined 0.93 per cent to 24,722, while the Jakarta Composite fell 1.51 per cent to 6,495.67.

Singapore's Straits Times bucked the trend, edging up 0.03 per cent to 5,675.97.

ANI