Sensex, Nifty fall in early trade as US-Iran tensions push up oil prices

Benchmark equity indices Sensex and Nifty fell sharply in early trade on Wednesday as renewed tensions between the US and Iran rattled investor sentiment and sent crude oil prices higher.

The BSE Sensex dropped 537.83 points to 77,642.89 in opening trade, while the NSE Nifty declined 163.55 points to 24,235.15.

Among the biggest drags on the Sensex were Asian Paints, InterGlobe Aviation, Reliance Industries, ITC, Bajaj Finance and Mahindra & Mahindra. On the other hand, Sun Pharma, HCLTech, Tech Mahindra, Power Grid and ICICI Bank were among the gainers.

Brent crude, the global oil benchmark, rose 2.55 per cent to $76.05 a barrel, reflecting concerns over the potential fallout of the latest flare-up in West Asia.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the market had moved back into uncertain territory following the fresh escalation in US-Iran tensions and the resulting rise in crude prices.

He said domestic markets had been gradually strengthening on the back of foreign institutional investor buying and improving macroeconomic indicators, but the geopolitical developments had cast a temporary shadow over that momentum.

Elsewhere in Asia, South Korea’s Kospi and Japan’s Nikkei 225 were trading lower, while China’s Shanghai Composite and Hong Kong’s Hang Seng were in positive territory.

US markets had ended lower overnight. Foreign institutional investors were net buyers of Indian equities on Tuesday, purchasing shares worth Rs 393.19 crore, according to exchange data.

In the previous session, late selling had dragged the Sensex down by 104.35 points, or 0.13 per cent, to close at 78,180.72, while the Nifty slipped 31.65 points, or 0.13 per cent, to settle at 24,398.70.

With PTI inputs