Markets open flat as crude stays above USD 100, geopolitical tensions weigh
Equity benchmark indices Sensex and Nifty opened on a muted note on Thursday as crude oil prices remained above USD 100 a barrel and persistent geopolitical tensions kept investors cautious.
The 30-share BSE Sensex gained 38.07 points to 74,809.95 in early trade, while the 50-share NSE Nifty rose 9.85 points to 23,439.20.
Among the Sensex constituents, Tech Mahindra, Axis Bank, State Bank of India, Power Grid, ITC and Infosys were trading with gains.
Mahindra & Mahindra, Adani Ports, Reliance Industries, Sun Pharma, InterGlobe Aviation and Bharat Electronics were among the laggards.
Brent crude, the global oil benchmark, was trading 0.20 per cent lower at USD 101 a barrel.
"Indian equities are expected to remain under pressure as elevated crude oil prices and rising US Treasury yields, amid persistent geopolitical tensions, continue to cloud the global macroeconomic outlook," said Ponmudi R, CEO of online trading and wealth-tech firm Enrich Money.
The combination of higher energy prices and firming bond yields is expected to keep risk appetite subdued and weigh on emerging-market equities, including India, he said.
Ponmudi said uncertainty over the possibility of de-escalation in the conflict with Iran was also keeping investors cautious.
"While US President Donald Trump said the conflict with Iran could end immediately after the midterm elections, the lack of clarity over the path to de-escalation is keeping investors cautious and the geopolitical risk premium firmly embedded in energy markets," he said.
Investors will also track upcoming US inflation data for indications on the Federal Reserve's future policy trajectory, he added.
Asian markets were largely lower, with South Korea's Kospi, Japan's Nikkei 225, Shanghai's SSE Composite and Hong Kong's Hang Seng trading in negative territory.
US markets also closed lower on Wednesday.
Foreign Institutional Investors (FIIs) sold equities worth Rs 582.99 crore on Wednesday, according to exchange data.
In the previous session, the Sensex fell 813.35 points, or 1.08 per cent, to settle at the day's low of 74,764.23. The Nifty declined 203.60 points, or 0.86 per cent, to close at 23,431.50.
