Markets Open Lower with Caution as Iran War Deadlock Rattles Investors; Oil Surges

Mumbai, April 28: Indian shares started Tuesday’s session weak, dragged lower by escalating concerns over the US-Iran war deadlock and soaring crude oil prices which are feared to stoke inflation and hit India’s growth story. The BSE Sensex dipped at the open and traded at 77,185, down 118 points or 0.15%, while the Nifty 50 declined 25 points or 0.10% to 24,068 around the same time on April 28, trimming some gains made on Monday.

The market sentiment remained negative from the start after US President Donald Trump voiced his dissatisfaction with Iran’s latest peace initiative, under which Iran had offered to put negotiations on its nuclear programme on hold till war endgame and shipping rights at Strait of Hormuz are worked out. Iran has largely kept oil shipments from the energy-rich Middle East producing region off-limits for buyers from across the world so far in the war, fuelling geopolitical tensions and pushing Brent crude up to $108.68 a barrel — its highest closing since April 7 — and WTI to as high as $96.87 a barrel in early Asian deals.

Gainers & Losers

Coal India was the top Nifty gainer in Tuesday morning deals, rising 2.75% to Rs 465, followed by Grasim which added 1.62% and Adani Enterprises which rose 1.52%. Adani Ports was up 0.84% while TCS climbed 0.70%. State Bank of India was the top loser on Nifty in Tuesday morning trade, down 1.12% to Rs 1,099, followed by Eternal which slipped 0.90%, HDFC Life down 0.57%, Axis Bank losing 0.56% and UltraTech Cement declining 0.50%.

Broader Markets

The broader markets traded stronger than the benchmarks with Nifty Smallcap 100 rising 0.65% and Nifty Midcap 100 up 0.26%, indicating buying continued below the largecap space. Sectorally, the Nifty Energy index was the top gainer, rising 0.96% on the back of rising crude oil prices which will benefit upstream companies, while Nifty CPSE gained 0.85% and Nifty Metal added 0.53%. On the opposite end, Nifty PSU Bank was the top loser among Nifty sectoral indices, declining 1.54%, while Nifty Bank slipped 0.63% and Nifty Private Bank lost 0.34% as worries over asset quality and rate trajectory weighed on lenders.

Asian Markets

Asian markets traded lower on Tuesday morning with Hong Kong’s Hang Seng down 0.67%, Pakistan’s KSE 100 losing 0.69% and Australia’s ASX All Ordinaries giving up 0.59%. Japan’s Nikkei 225 index fell 0.49% while Shanghai’s composite index eased down by 0.22% as most Asian markets reacted negatively to the Iran war row and its impact on energy prices.

US Markets

Wall Street ended mixed on Monday with Dow Jones declining 0.13% and NYSE Composite losing 0.13%, while Nasdaq Composite gained 0.20% and S&P 500 edged higher by 0.12%, as gains in technology stocks offset losses in the broader market.

Oil Prices

Crude oil futures extended their winning streak for seventh straight session on Tuesday with Brent crude trading higher at $108.68 per barrel and WTI climbing to as high as $96.87 per barrel as diplomatic efforts to resolve the US-Iran conflict hit a deadlock with Iran refusing to release its oil shipments via Strait of Hormuz leaving rest of the world without oil supplies from the key Middle East producing region.

Monday’s Session

The Indian equity benchmarks snapped sessions of losses with sharp gains on Monday helped by reversal in IT stocks which bounced back from heavy selling on Friday along with buying in pharma, metals, realty, auto, FMCG and banking stocks. The Sensex climbed 639 points to end at 77,304 and Nifty added 195 points to close at 24,093. Broader markets traded far better than the benchmarks with Nifty Midcap index gaining 1.5% and Nifty Smallcap index rising 1.8%.

Sources:

• www.bseindia.com
• https://www.nseindia.com/market-data/live-market-indices
• https://www.nseindia.com/market-data/top-gainers-losers