Market Opens Flat Amid Global Tensions
Indian equity benchmarks opened on a cautious note on Tuesday, September 1, as strong domestic economic growth failed to fully offset concerns over rising crude oil prices and escalating US-Iran tensions, according to a report by the Free Press Journal. In early trade, the BSE Sensex was down around 0.1% at 76,884.91, while the NSE Nifty 50 slipped 0.17% to 24,039.75, as per the same report.
The Hindustan Times, citing a PTI report, reported that weak trends in global markets and foreign fund outflows dented investor sentiment. The report noted that among the 30 Sensex firms, Adani Ports, ITC, Bharti Airtel, HDFC Bank, Infosys and Kotak Mahindra Bank were the major laggards, while Sun Pharma, ICICI Bank, Axis Bank and State Bank of India were among the gainers.
GDP Growth Provides Limited Support
India's real GDP expanded 7.8% year-on-year during the April-June quarter, supported by investment, manufacturing and consumer demand, according to the Free Press Journal. The growth figure was stronger than expectations and provided some support to equities.
However, the positive domestic data was overshadowed by renewed geopolitical concerns. Rising tensions between the US and Iran have pushed crude oil prices above $90 per barrel, raising fresh worries for oil-importing India, the report said.
Oil Prices Climb on Geopolitical Risks
Brent crude, the global oil benchmark, jumped 3.63% to USD 91.30 per barrel, as reported by the Hindustan Times. The Free Press Journal also noted that crude oil prices rose above $90 per barrel due to US-Iran tensions.
Vinod Nair, Head of Research at Geojit Investments Limited, said: "Escalating tensions between the US and Iran have kept investors on edge, as fading prospects of a diplomatic breakthrough pushed crude oil prices and global bond yields higher. Rising crude oil prices and bond yields have renewed concerns over energy-led inflation and a higher interest rate environment, which could weigh on the earnings cycle."
Nair added that the Fed chair's recent comments after the Jackson Hole address have increased expectations of a potential September rate hike, keeping global yields elevated and contributing to near-term volatility in emerging markets.
Sectoral and Broader Market Movers
The Free Press Journal reported that selling pressure was visible across most sectors, with 12 of the 16 major sectoral indices trading lower in early deals. Banking stocks fell around 1%, while mid-cap and small-cap indices also remained under pressure.
Among broader-market gainers in early trade were Gabriel India, Balrampur Chini, Cyient, Indegene and Ola Electric, according to the same report. On the losing side, Adani Energy Solutions and Adani Enterprises witnessed sharp declines, while Mastek, Alok Industries and Zee Entertainment were also among the notable laggards.
Outlook
Trading on both the BSE and NSE began on a cautious footing, with geopolitical risks and elevated crude prices limiting the positive impact of India's stronger GDP growth, as per the Free Press Journal. The Hindustan Times, citing analysts, noted that the combination of rising crude prices, elevated bond yields and expectations of a US rate hike could continue to influence market sentiment in the near term.