Sensex Falls 300 Points As Oil Spike Weighs; Nifty Slips Below 24,550

Indian benchmark indices opened lower on Tuesday as a sharp rise in crude oil prices and escalating concerns over tensions in the Middle East dampened investor sentiment. Elevated oil prices continued to raise worries over inflation, India's import bill and corporate profitability, prompting selling in frontline banking and financial stocks.

At around 9:25 am, the BSE Sensex was down more than 300 points at 78,215, while the NSE Nifty 50 slipped over 50 points to trade below the 24,550 mark. Broader markets, however, remained resilient, with the Nifty Midcap 100 and Nifty Smallcap 100 indices gaining up to 0.4%.

Among Sensex constituents, IndiGo, Bajaj Finance and Bharti Airtel declined between 1% and 2%. UltraTech Cement, Axis Bank, State Bank of India, Reliance Industries, Kotak Mahindra Bank and Sun Pharma also traded nearly 1% lower. On the other hand, HCLTech, Tech Mahindra and Titan gained more than 1% each, supported by buying in information technology stocks.

Sectorally, the Nifty PSU Bank and Nifty Private Bank indices fell 0.5-0.7% to emerge as the biggest losers, while the Nifty IT index gained nearly 1%. Market breadth remained marginally positive, with 1,373 stocks advancing against 1,169 declines on the NSE, while 119 shares remained unchanged.

Crude Oil, FII Flows In Focus

Brent crude traded above $87 a barrel after surging on concerns over possible disruptions around the Strait of Hormuz, while US West Texas Intermediate (WTI) crude hovered near $82 a barrel. Higher oil prices remain a key risk for the Indian economy as they can increase inflationary pressures, widen the current account deficit and squeeze corporate margins.

Despite the weakness in equities, foreign institutional investors (FIIs) have remained supportive of the domestic market, buying around $1.5 billion worth of Indian equities so far in August after turning net buyers in July.

Investors are also tracking Adani Group stocks following a US court decision involving Gautam Adani, while market participants are monitoring the impact of NSE's decision to replace Wipro in the Nifty 50 index from September 30.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said rising Brent crude prices remain an overhang for markets, though improving domestic fundamentals continue to provide support.

"Rising Brent crude price continues to be an irritant for the market even as other fundamentals exhibit strength. A significant pivot in the market is the FIIs turning buyers encouraged by the better-than-expected Q1 results and stability in the rupee. These positives have the potential to keep the market resilient with a slight upward bias," he said.

Vijayakumar added that robust domestic consumption is likely to sustain earnings growth through FY27, while higher FCNR(B) inflows could strengthen the rupee and attract additional foreign investment. He also noted that FIIs are rotating capital into Indian equities from South Korea and Taiwan, with a preference for sectors such as telecom, renewable energy, capital goods and pharmaceuticals over banking stocks.