Sensex, Nifty slipped as elevated crude prices hurt sentiment.
IT stocks outperformed, with Infosys and TCS leading gains.
West Asia tensions and FPI selling kept markets under pressure.
\Indian benchmark indices opened lower on Tuesday as investors remained cautious amid elevated crude oil prices and fresh uncertainty surrounding developments in West Asia, while technology stocks provided some support to the broader market.
At around 10 am, the NSE Nifty50 was trading at 23,316, down 65 points, while the BSE Sensex fell 152 points to 74,114 after recovering from steeper opening losses. Earlier in the session, the Nifty had slipped as much as 0.7% to 23,229, while the Sensex dropped 436 points to 73,831.
1 May 2026
Get the latest issue of Outlook Business
The weakness came as crude oil prices remained elevated after posting their biggest single-day gain in nearly a month. Brent crude traded near $95 per barrel after surging 4.2% in the previous session, while WTI crude hovered around $92 per barrel. The Strait of Hormuz continues to remain a key focus for global markets as any disruption to energy supplies could have significant implications for oil-importing economies such as India.
IT Stocks Outperform
Despite the broader weakness, information technology stocks emerged as the standout performers. The Nifty IT index gained 3.15% to trade at 30,798.85, making it the best-performing sectoral index in early trade. Nifty Metal also traded in positive territory, while all other major sectoral indices remained under pressure.
Infosys, TCS, LTIMindtree, Persistent Systems, Tech Mahindra and Coforge led the gains among technology stocks as investors rotated towards export-oriented sectors that could benefit from a weaker rupee and resilient global demand.
Broader market sentiment, however, remained subdued as most sectors traded in the red. Market participants continued to monitor geopolitical developments, foreign fund flows and movements in crude oil prices for near-term direction.
Geopolitical Tensions
Investor caution intensified after reports that Iran had suspended negotiations with the United States aimed at ending the conflict in West Asia. Iranian state media said the move was in response to Israel's actions in Lebanon.
The development followed comments from Israeli Prime Minister Benjamin Netanyahu indicating possible military action against Hezbollah positions in Beirut. Although no strikes had taken place, the rhetoric raised concerns that regional tensions could escalate further.
At the same time, US President Donald Trump attempted to reassure markets by stating that negotiations with Iran were continuing and that he expected an agreement to extend the ceasefire and reopen the Strait of Hormuz within a week.
The mixed signals kept investors on edge, particularly after benchmark indices had already fallen sharply in the previous session. On Monday, the Nifty declined 0.7% while the Sensex dropped more than 500 points.
Macro Headwinds Persist
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said several factors continue to weigh on India's market performance.
"The trend of sustained AI trade, new records for markets in the US, South Korea and Taiwan, sustained FPI selling in India and India's underperformance are continuing with no immediate signs of reversal," he said.
According to Vijayakumar, India's economic outlook has also come under pressure due to the energy shock, which has led to downward revisions in growth expectations and upward revisions in inflation forecasts. He added that the IMD's forecast of monsoon rainfall at 90% of the long-term average has created another layer of uncertainty for growth and inflation.
He noted that a resolution of the West Asia conflict and a meaningful decline in crude oil prices would significantly improve sentiment, but repeated expectations of a breakthrough have so far failed to materialise.
For now, analysts believe strong domestic fundamentals, including better-than-expected industrial production, healthy automobile sales and attractive market valuations, may help limit downside risks. However, the market's near-term direction is likely to remain closely tied to developments in crude oil prices and geopolitical negotiations in West Asia.
