Sensex, Nifty Flat in Early Trade as Crude Oil Prices, Geopolitical Tensions Weigh

Indian equity benchmarks traded on a flat note in early trade on Thursday as rising crude oil prices, higher US bond yields and geopolitical tensions weighed on investor sentiment. In early trade, Sensex was trading 21.32 points or 0.03 per cent lower at 74,742.91, while Nifty declined 7.85 points or 0.03 per cent to 23,423.65. Earlier in the day, the 30-share index opened at 74,742.54, down 0.02 per cent or 21.69 points.

Similarly, Nifty started the session at 23,446.60, an increase of 0.06 per cent or 15.09 points. Sectorally, PSU banks led gains, rising more than 1 per cent, followed by Nifty Oil & Gas which gained 0.61 per cent. Meanwhile, Nifty Media, Nifty FMCG, Nifty Private Bank and Nifty IT also traded higher. In contrast, Nifty Auto was top loser sectorally, falling 0.66 per cent, while healthcare, pharma, consumer durables and cement stocks also remained under pressure. Among Nifty constituents, Mahindra & Mahindra was the top loser, down 1.3 per cent, followed by Bajaj Auto, Asian Paints and Eicher Motors. IndiGo, HCLTech, Shriram Finance and Dr Reddy’s Laboratories were also trading lower.

“With Nifty dipping below the 23500 resistance, the market construct has turned weak. Technically the market is vulnerable to further correction, and the fundamental macro trends continue to deteriorate,” according to the market experts. They said Brent crude had spiked above $101 a barrel and the US 10-year yield had moved up to 4.83 per cent, increasing concerns over a possible Federal Reserve rate hike this month. Geopolitical tensions in the Middle East have also deteriorated, according to them. Analysts said prolonged crude prices above $100 could affect India’s GDP growth and corporate earnings.

Energy-sensitive sectors such as aviation, paints, adhesives, tyres and chemicals are likely to face pressure, while FMCG, pharmaceuticals and healthcare could remain resilient, they noted. Digital platform companies continue to be on strong footing, while large private banks remain fundamentally strong despite technical weakness. “Recovery attempts in the last few days have turned out to be brief, and have only served to add momentum to downsides,” another market expert said, adding that 23,260-23,000 was the next support zone, while the upside marker had slipped to 23,520.

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