Sensex, Nifty Open Higher But Lose Early Gains as Crude Oil Prices Surge on US-Iran Tensions

Mumbai, August 21 (TNA) Indian equity benchmarks opened on a cautiously positive note on Friday, gapping up at the start of trade, but soon failed to sustain the momentum as surging crude oil prices and overnight losses on Wall Street weighed on sentiment.

The Sensex opened at 77,701.07, up over 160 points from its previous close of 77,537.72, while the Nifty opened at 24,284.05 against the previous close of 24,231.85. The early gains, however, proved short-lived. Shortly after opening, the Nifty slipped to around 24,221.35, down 10.50 points, or 0.04 per cent, while the Sensex eased to around 77,493.20, down 44.52 points, or 0.06 per cent.

Most broader market indices traded in the red in early deals, with most sectoral indices also remaining under pressure, though metal and private bank stocks bucked the trend to trade in positive territory. Among individual movers, Kotak Bank, Hindalco, HDFC Bank, Tata Steel, Power Grid, Coal India, Eicher Motors, Axis Bank, Bajaj Finance, NTPC and ONGC were trading in the green, while TCS, Titan, Grasim, Infosys and HUL were among the laggards.

By mid-morning, sentiment had stabilised somewhat. As of 10:00 am, the Sensex had risen 82.30 points, or 0.11 per cent, to 77,620.02, and the Nifty50 was up 18.65 points, or 0.08 per cent, at 24,250.50. In the broader market, the Nifty MidCap was down 0.08 per cent, while the Nifty SmallCap gained 0.9 per cent. On the sectoral front, Nifty Metal emerged as the top performer, gaining 0.94 per cent, while the Nifty IT index gained 0.87 per cent. From the Sensex pack, Eternal, Bharat Electronics, Tata Steel, Tech Mahindra and Kotak Mahindra Bank were the top gainers, while TCS, IndiGo, HCL Tech, HUL and M&M were among the top losers.

The volatility was largely attributed to a sharp rise in crude oil prices amid escalating US-Iran tensions. Crude prices climbed to one-month highs after President Trump threatened "tremendous economic consequences" on nations trading with Iran, while Brent crude was trading at around $93.42 a barrel and crude oil near $86.37 a barrel. Asian markets had opened lower but were recovering, tracking a sharp pullback on Wall Street driven by a rebound in long-dated US Treasury yields. Despite recent efforts by the US Treasury Department to boost long-term government debt buybacks, persistent investor anxiety over inflation and rising national debt pushed 10- and 30-year Treasury yields higher, weighing on equities globally.