Mumbai: Indian equity benchmarks started Thursday’s session — the final trading day of the week — on a weaker note, with both indices declining nearly 1 per cent in early deals, as a sharp jump in crude oil prices dented sentiment and outweighed support from stock-specific earnings gains.
Sensex fell as much as 0.95 per cent or over 700 points to 76,759.37 in early trade, hitting an intraday low, while Nifty declined 0.96 per cent or more than 200 points to 23,943.45.
Selling pressure was broad-based, with auto, banking, realty, metal, consumer durables and FMCG stocks, falling up to 1 per cent. Eternal, Shriram Finance, IndiGo, M&M, Jio Financial Services, Tata Motors PV, Axis Bank, Grasim Industries, Asian Paints, ICICI Bank and HDFC Bank were among the top laggards.
While Nifty 100, Nifty Midcap, Nifty 200 and Nifty 500 indices declined by up to around 1 per cent. Meanwhile, the India VIX rose 2.7 per cent to 17.91, indicating heightened market volatility.
According to a market expert, two key headwinds could impact markets in the near term.
“Brent crude at around $120 threatens India’s macroeconomic stability. If prices remain elevated, it could pose downside risks to growth and push inflation higher,” the expert said.
“Secondly, stronger-than-expected results from AI majors in the US and South Korea may extend the ongoing AI trade, potentially leading to further portfolio outflows from India,” he added.
The Fed’s decision to hold rates was on expected lines and is unlikely to have a significant impact. However, the rise in US 10-year bond yields to 4.4 per cent could further incentivise capital outflows from India,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
Exit polls indicating consolidation of the ruling party’s position may offer some sentiment support but do not materially alter market fundamentals.
“Investors can focus on companies reporting better-than-expected Q4 results and strong outlooks, where opportunities remain,” he said.
Oil prices rallied after US President Donald Trump reportedly held talks with oil companies on steps to reduce the impact of a potential prolonged blockade of Iran’s ports, raising concerns over possible disruptions to global crude supplies.
Separately, the US Federal Reserve left interest rates unchanged, broadly in line with expectations, while cautioning about inflation risks stemming from the Iran conflict. Market participants have also pared back expectations of rate cuts in 2026.
Crude oil prices are approaching their 52-week highs of $114.81. Brent crude was trading at $113.18 per barrel, up 2.48 per cent from the previous close, while US West Texas Intermediate (WTI) stood at $109.64 per barrel, also higher on the day.
However, Brent crude hovered close to $120 per barrel after surging over 6 per cent on Wednesday to its highest level since June 2022.
In Asian markets, indices were mixed. Japan’s Nikkei and Hong Kong’s Hang Seng were down over 1 per cent, South Korea’s KOSPI declined 0.40 per cent, while Singapore’s Straits Times gained 0.65 per cent.
On Wall Street, US markets ended on a flat note, with the S&P 500 settling at 7,135.95, down 0.04 per cent, and the Nasdaq finishing at 24,673.24, up 0.04 per cent.
Notably, domestic equity markets will remain shut for trading on Friday, May 1, in observance of Maharashtra Day.
(IANS)
