Sensex, Nifty Remain Under Pressure As Oil Near $90 Overshadows Global Cues

Indian equity markets opened on a flat note with a negative bias on Thursday before extending losses in early trade as elevated crude oil prices and geopolitical concerns continued to weigh on investor sentiment.

At around 9:30 a.m., the Sensex was down about 186 points at 77,790, while the Nifty 50 fell around 95 points to trade near 24,340.

Most Asia-Pacific markets traded higher after softer-than-expected US inflation boosted global risk appetite, but Indian equities underperformed as rising crude prices remained a key overhang.

Inflation Data Keeps RBI Outlook In Focus

India's retail inflation accelerated marginally to 4.45% year-on-year in July from 4.38% in June, slightly above market expectations of 4.4%. According to Elara Securities, the increase was largely driven by food prices, while contained super-core inflation suggests the Reserve Bank of India is unlikely to raise rates immediately.

The brokerage expects the central bank to maintain a status quo on interest rates through CY26, with a possible 25-basis-point hike only in the first quarter of CY27 if inflationary pressures persist.

Investors also tracked MSCI's August index review, which added Adani Energy Solutions, Laurus Labs, LensKART Solutions and Billionbrains Garage (Groww) to the MSCI India Index, while Astral, Balkrishna Industries and SBI Cards were removed.

Among the Nifty 50 stocks, Apollo Hospitals, Shriram Finance, Tech Mahindra and Eternal were the top gainers in early trade. Grasim, UltraTech Cement, Hindalco, Titan and Reliance Industries led the losses as weakness in heavyweight stocks weighed on the benchmarks.

Crude Prices Remain The Key Risk

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the market is likely to remain range-bound despite strong domestic fundamentals.

"The market is likely to continue along the consolidation phase and sideways movements in the near term. The tailwind for the market is the strong fundamentals coming from robust growth and earnings momentum, which, in turn, is getting support from sustained liquidity flows from domestic investors. High-frequency indicators like GST collections, freight, auto sales and credit growth are big positives that can surprise growth and earnings on the upside.

"The main headwind continues to be the elevated crude prices and the uncertainty regarding the crude price trends.

"The ideal investment strategy at this juncture is to remain invested and continue investing systematically."