Mumbai: Benchmark stock market indices opened on a positive note on Wednesday, snapping a four-day losing streak, even as global concerns around rising crude oil prices and geopolitical tensions in West Asia continued to weigh on investor sentiment.
In early trade, however, markets turned volatile and slipped into the red. As of 9:47 am, the S&P BSE Sensex was down 216.67 points at 74,342.57, while the NSE Nifty50 declined 68.50 points to 23,311.05, indicating cautious trading despite an optimistic start.
Early gains fade amid volatility
The domestic equity markets initially saw buying interest at the opening bell, supported by selective gains in heavyweight stocks. However, the optimism proved short-lived as profit booking and global uncertainties triggered a pullback.
The recent rise in crude oil prices, driven by prolonged geopolitical tensions in West Asia, has emerged as a key concern for investors. Market participants are increasingly wary of the impact on India’s macroeconomic stability, particularly inflation and external balances.
Asian Paints leads gainers
Among the Sensex constituents, Asian Paints Ltd emerged as the top gainer in early trade, rising over 3 per cent. The stock saw strong buying interest, helping cushion the broader market decline.
Other notable gainers included Adani Ports and Special Economic Zone Ltd, which advanced around 2 per cent, and Tata Steel Ltd, which rose 1.39 per cent. Bharat Electronics Ltd also traded higher with gains of over 1 per cent, while Bharti Airtel Ltd posted modest gains of nearly 1 per cent.
The gains in these stocks reflected selective buying in sectors such as infrastructure, metals and telecom, even as the broader indices struggled to hold onto early advances.
Selling pressure in key stocks
On the flip side, several heavyweight stocks witnessed selling pressure, dragging the indices lower.
Power Grid Corporation of India Ltd recorded the sharpest decline among Sensex stocks, falling 2.35 per cent. Titan Company Ltd also slipped 1.49 per cent, while NTPC Ltd declined 1.18 per cent.
Financial stocks were not spared, with Bajaj Finance Ltd dropping 0.94 per cent and State Bank of India Ltd falling 0.89 per cent in early trade.
The mixed performance highlights the cautious approach adopted by investors amid uncertain global cues.
Macroeconomic concerns intensify
Market experts have flagged growing risks to India’s macroeconomic outlook due to sustained high crude oil prices. According to Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, the market had earlier been factoring in a quick resolution to the West Asia crisis and a subsequent fall in crude prices.
“Now, this appears difficult. Consequently, India’s macros are taking a hit. As the CEA said, this has become a ‘live Balance of Payments stress test.’ The rupee has touched a new low of 95.63 against the dollar. The downside risk to India’s growth and upside risk to inflation has increased. This has negative implications for markets,” he said.
The depreciation of the rupee and rising import costs are expected to put additional pressure on the economy, particularly in sectors dependent on imported inputs.
Investment strategy amid uncertainty
Experts advise investors to adopt a cautious stance in the current environment. With foreign institutional investors (FIIs) likely to remain in a selling mode, markets may continue to face pressure in the near term.
“With the AI trade still intact, FIIs are likely to continue on the sell mode. The derivatives data indicate this. Investors should opt for safety now. Better to remain in cash till there is clarity on the crude price,” Vijayakumar noted.
He added that defensive sectors such as pharmaceuticals could offer relatively safer investment opportunities during periods of heightened volatility. Long-term investors, meanwhile, may consider gradually accumulating quality banking stocks during market corrections.
Conclusion
While Indian equity markets attempted a recovery at the opening, persistent global uncertainties and macroeconomic concerns quickly erased early gains. The interplay between crude oil prices, currency movements and geopolitical developments will likely dictate market direction in the coming sessions.
Investors are expected to remain cautious, focusing on sector-specific opportunities while closely monitoring global cues. Until there is greater clarity on key risk factors, volatility is likely to remain a defining feature of the market.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the News Karnataka Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)