Indian markets open lower amid FII outflows, geopolitical uncertainty; IT stocks drag

NEW DELHI: Indian equity benchmark indices opened lower on Wednesday, extending losses from the previous session amid continued foreign institutional investor (FII) outflows and lingering geopolitical concerns in West Asia. The BSE Sensex fell 142.11 points, or 0.19 per cent, to open at 74,507.73, while the NSE Nifty 50 declined 67.60 points, or 0.29 per cent, to 23,415.95.

Market experts said investors remain cautious as global geopolitical tensions and elevated crude oil prices continue to influence sentiment. Banking and market expert Ajay Bagga said uncertainty persists around the status of US-Iran negotiations, with conflicting signals emerging from both sides.

“Confusion reigns on the status of the US-Iran talks. Iranian media is saying that talks have been interrupted, while US Secretary of State Marco Rubio has said talks are progressing well. President Donald Trump has also held out the possibility of a truce deal by next week,” Bagga noted.

He added that despite ongoing military exchanges in the region, financial markets appear to be betting on de-escalation. “Asian markets are up this morning. Oil is a different story, with August Brent futures at USD 96-97 levels. Markets are shrugging off the rhetoric and voting for the continued ceasefire, with both sides having limited appetite to escalate,” he said.

However, Bagga cautioned that risks remain. “The risk remains escalation, which is not fully priced in either stocks, bonds or oil prices,” he noted. Domestically, Bagga highlighted persistent foreign fund outflows as a key concern for Indian equities. “Indian markets continue to suffer from FII outflows with no catalyst in sight that could reverse this. Already in five months of 2026, FIIs have taken out more than the entire 2025 outflows from Indian secondary markets,” he said.

Sectorally, most indices traded in negative territory. Nifty IT was the worst performer, falling over 2 per cent. Other sectors witnessing losses included FMCG, PSU Bank, Media, Realty, Private Bank, Auto and Pharma. In contrast, Nifty Metal, Oil & Gas and Healthcare managed modest gains.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, said key support levels for traders are placed at 23,300 and 23,220 on the Nifty, and 74,000 and 73,800 on the Sensex. “As long as the market trades above these levels, the pullback formation is likely to continue,” he said, adding that the Nifty could retest the 50-day and 20-day simple moving averages near 23,700 and 23,770, respectively.

Meanwhile, global cues remained mixed. According to Bagga, US equities have continued to climb despite narrow market participation. “The US markets over the last five days have risen each day while the advance-decline ratio has been negative. This points to AI momentum and concentrated moves taking US markets up to record levels,” he said.

Among Asian markets, Japan’s Nikkei and Taiwan’s benchmark index posted strong gains, while Hong Kong’s Hang Seng and GIFT Nifty traded lower. At the time of filing, Brent crude was trading near USD 96.85 per barrel, up 0.89 per cent, reflecting continued concerns over energy supplies amid geopolitical tensions. (ANI)