MUMBAI: Indian benchmark equity indices opened sharply lower on Friday amid escalating tensions in West Asia and a surge in crude oil prices, raising concerns over the impact of higher energy costs on India’s economic growth and corporate earnings. The Nifty 50 index 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 oil was trading at around $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 transitioning into a full-scale direct war primarily involving the United States and Iran. The escalation has severely disrupted global energy corridors and triggered regional military mobilisations, putting further pressure on crude oil prices.
V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said the market was facing stronger headwinds as the geopolitical conflict escalated 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 $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 flagged rising US bond yields as another major concern for global equities. “An equally strong headwind is the rise in US 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 its timing remained difficult to predict. On the domestic market, he said the booming Indian IPO market had become a major attraction for investors, with heavy oversubscription and attractive listing gains drawing large numbers of investors. He also pointed to investor excitement around the upcoming NSE IPO, which is scheduled to open for the public on September 17.
Among sectoral indices, selling pressure was visible across almost all major sectors at the opening. Nifty Metal was the biggest laggard, declining 2.46 per cent, followed by Nifty Realty, which fell 1.75 per cent. Nifty PSU Bank declined 1.38 per cent, while Nifty Auto fell 1.26 per cent and Nifty Private Bank dropped 1.10 per cent. The Nifty FMCG index declined 0.78 per cent, while Nifty IT was down 0.20 per cent.
Other Asian markets were also largely under pressure on Friday. Japan’s Nikkei 225 was down 2.90 per cent at 63,381, while South Korea’s KOSPI declined 2.44 per cent to 6,862.22. Taiwan Weighted fell 1.91 per cent to 46,045.83, while Shanghai Composite was down 1.82 per cent at 3,862.73.
Hong Kong’s Hang Seng declined 0.93 per cent to 24,722, and Jakarta Composite fell 1.51 per cent to 6,495.67. Singapore’s Straits Times was marginally higher by 0.03 per cent at 5,675.97. (ANI)
