Benchmark stock market indices started the day on a negative note due to a surge in crude oil prices, with Brent surpassing the $100 mark for the fourth consecutive day. The S&P BSE Sensex dropped by 625.09 points to 77,891.40, while the NSE Nifty50 fell by 173.90 points to 24,204.20 by 9:26 am.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, highlighted the prevailing uncertainty in the market, emphasizing the lack of clarity regarding its short-term direction. He expressed concerns over the prolonged war duration exceeding initial expectations, coupled with Brent crude prices rebounding to $103, posing heightened risks to global growth and India’s macroeconomics. If Brent crude maintains an average of $100 for an extended period, India’s economic growth and corporate earnings are likely to suffer.
Sun Pharmaceutical Industries Ltd and Power Grid Corporation of India Ltd were the only gainers in the early trading session, with increases of 0.35% and 0.33% respectively. Conversely, Tech Mahindra Ltd recorded the steepest decline of 2.43%, followed by Eternal Ltd at 1.94%, Mahindra and Mahindra Ltd at 1.91%, Indigo Ltd at 1.89%, and Asian Paints Ltd at 1.71%.
Vijaykumar noted that the United States, as a net energy exporter, is shielded from the energy crisis, ensuring robust corporate earnings. However, energy importers like India could face challenges if the Hormuz route remains blocked for an extended period. He observed a notable trend of the broader market outperforming, with minimal pressure from Foreign Institutional Investors (FIIs) and increased interest in mid and small-cap stocks. This trend is expected to persist, driving the broader market’s continued outperformance.
(Note: The opinions and suggestions expressed in this article are solely those of the experts and do not represent the views of the India Today Group. It is recommended to seek advice from a qualified broker or financial advisor before making investment decisions.)