Sensex, Nifty slip in early trade on higher oil prices, tariff concerns

Indian benchmark equity indices opened lower on Wednesday as investors reacted to rising crude oil prices, escalating tensions involving the US and Iran, and fresh concerns over a phased US tariff plan targeting generic drugs.

The BSE Sensex fell 371 points, or 0.48 per cent, to 77,097 in early trade, while the NSE Nifty50 declined 106 points, or 0.44 per cent, to 24,081.

Broader markets also traded in negative territory, with the Nifty Midcap 100 slipping 0.16 per cent and the Nifty Smallcap 100 falling 0.33 per cent.

Among sectoral indices, pharmaceutical stocks where the biggest losers after the US announced a phased tariff plan for generic medicines. The Nifty Pharma index declined 0.99 per cent, while the Nifty Mid Small Healthcare index dropped 0.93 per cent. PSU banks also came under pressure, with the Nifty PSU Bank index losing 0.86 per cent.

In contrast, automobile stocks outperformed the broader market, with the Nifty Auto index gaining 0.79 per cent. FMCG, metal and consumer-related stocks also edged higher.

Market analysts said the early earnings season had provided encouraging signals for the automobile sector, with export performance and management commentary pointing to sustained optimism. They also noted that the recent correction in leading banking stocks appeared to be easing.

Analysts added that the rupee was likely to remain stable, supported by continued inflows into Foreign Currency Non-Resident (FCNR) deposits, which have crossed the $20 billion mark. They also said the recent weakness in semiconductor-related trade and the correction in markets such as South Korea had made Indian equities comparatively more attractive from a valuation perspective.

The Nifty had ended lower for a second straight session on Tuesday, slipping 0.2 per cent to close below the 24,200 level. Market participants said immediate support for the index lies around 24,100, followed by the psychologically important 24,000 mark, while the 24,300-24,400 zone remains a key resistance area.

Elsewhere in Asia, most major markets traded higher, tracking overnight gains on Wall Street as investors awaited earnings from leading US technology companies. Japan's Nikkei climbed 1.93 per cent, China's Shanghai Composite rose 0.35 per cent, Shenzhen gained 0.36 per cent and South Korea's Kospi advanced 4.31 per cent, while Hong Kong's Hang Seng Index slipped 0.69 per cent.

US equities closed firmly higher overnight, with the Nasdaq rising 1.29 per cent, the S&P 500 gaining 0.89 per cent and the Dow Jones Industrial Average adding 0.74 per cent.

Foreign institutional investors remained net buyers of Indian equities on Tuesday, purchasing shares worth Rs 1,650 crore, while domestic institutional investors were net sellers to the tune of Rs 656 crore.

With IANS inputs