Sensex, Nifty Slip Amid Crude Rally Despite Positive Asian Markets

Indian benchmark indices opened lower on Thursday as rising crude oil prices and continued foreign institutional investor (FII) selling weighed on sentiment, even as most Asian markets traded in positive territory.

At around 9:30 a.m., the Sensex was down 341.66 points, or 0.45%, at 76,413.38, while the Nifty 50 fell 81.20 points, or 0.34%, to 23,915.05.

Investor sentiment remained under pressure after crude oil prices climbed above $95 a barrel following fresh US strikes on Iran and attacks on oil tankers in the Red Sea by Yemen's Houthi rebels, raising concerns over potential supply disruptions.

Brent crude for September delivery rose 2% to $95.99 a barrel, while US West Texas Intermediate (WTI) gained around 1.7% to $88.27 a barrel.

The latest gains came after reports that a commercial tanker was struck by an unidentified projectile around 70 nautical miles southwest of Al Shuqaiq. The United Kingdom Maritime Trade Operations (UKMTO) said the incident caused a fire on board, although no injuries were reported.

Higher crude prices remain a key concern for India, the world's third-largest importer and consumer of oil, as sustained increases could fuel inflation, widen the trade deficit, squeeze corporate margins and weigh on economic growth.

The resurgence in oil prices has also prompted investors to reassess the global inflation outlook. A prolonged rise in crude could complicate the US Federal Reserve's path toward monetary easing, even as markets await more corporate earnings for clues on economic resilience.

Foreign institutional investors remained net sellers in Indian equities, offloading shares worth ₹819.20 crore on Wednesday, adding to the cautious mood in domestic markets.

Asian Markets Trade Higher

Despite geopolitical concerns, most Asian markets traded higher on Thursday as investors shifted focus to the upcoming corporate earnings season.

South Korea's Kospi advanced 3.47%, Japan's Nikkei 225 gained 1.22%, and Australia's ASX 200 rose 1.06%, while China's Shanghai Composite edged 0.01% lower.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the Houthis' attacks on Saudi Arabian tankers in the Red Sea have intensified the US-Iran conflict and pushed Brent crude above $95 a barrel, reviving concerns over India's vulnerability to elevated oil prices.

He said the negative sentiment is likely to keep the domestic market subdued in the near term. However, Vijayakumar believes the correction offers long-term investors an opportunity to gradually accumulate high-quality stocks in growth sectors at attractive valuations. He added that banking stocks appear reasonably valued given strong credit growth and low non-performing assets, while June-quarter earnings from consumer-facing digital companies point to healthy growth prospects.