Stock markets decline in early trade as crude oil jumps to US$ 91 per barrel

Indian benchmark indices Sensex and Nifty fell in early trade as elevated crude oil prices and escalating Iran-US tensions dampened investor sentiment. Rising US bond yields and foreign fund outflows added pressure, while gains in select stocks and resilient domestic earnings offered some support

Mumbai: Market benchmark indices Sensex and Nifty declined in early trade on Tuesday as elevated crude oil prices and rising tensions in West Asia weighed heavily on investors’ sentiment.

The 30-share BSE Sensex was down 278.32 points to 77,450.64 in early trade. The 50-share NSE Nifty edged lower by 57.65 points to 24,230.45.

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From the Sensex pack, Bharti Airtel, Asian Paints, InterGlobe Aviation, Infosys, HCL Tech, and Tech Mahindra were among the major laggards.

Reliance Industries, Sun Pharma, Maruti, and Axis Bank were among the winners.

Brent crude, the global oil benchmark, traded 0.63 per cent higher at USD 91.46 per barrel.

“Two developments during the last several hours are likely to impact the market today,at least in the early hours of trading. One, Brent crude has again spiked above USD 91 on escalation of tensions between Iran and the US. Two, the US 10-year bond yield has increased to 4.73 per cent and this is negative for FII inflows which had turned positive in July and August so far,” V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.

The tailwind for the market is the resilient Indian economy and clear indications of a turnaround in earnings growth, he added.

In Asian markets, South Korea’s Kospi, Japan’s Nikkei 225, Shanghai’s SSE Composite index, and Hong Kong’s Hang Seng index traded lower.

US markets ended in negative territory on Monday.

“Elevated crude, with Brent near USD 91 on unresolved Iran tensions, kept sentiment guarded. Wall Street mirrored the caution,” Rajesh Palviya, Head of Research at Axis Direct, said.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,535.10 crore on Monday, according to exchange data.

On Monday, the Sensex declined 281.09 points, or 0.36 per cent, to settle at 77,728.16. The Nifty was down 78.35 points, or 0.32 per cent, to end at 24,287.65, taking the losses to the fifth day.