Mumbai, Sep 2 (SocialNews.XYZ) Domestic equity benchmarks opened sharply lower on Wednesday weighed down by a surge in crude oil prices after the US and Iran exchanged strikes overnight, escalating tensions in the Middle East.
Sensex opened 472.96 points or 0.61 per cent lower at 76,471.32, while Nifty started the session declining nearly 200 points or 0.82 per cent at 23,858.
Sectorally, realty, IT and auto stocks bore the brunt of the selling pressure. Nifty Realty index fell almost 2 per cent, Nifty IT declined 1.82 per cent and Nifty Auto shed 1.78 per cent. Meanwhile, financial services, cement, media, FMCG and metal indices were also in red zone.
Analysts said domestic fundamentals remained supportive with robust economic activity and improving earnings prospects providing a cushion against global headwinds. However, the sharp rise in crude prices following the escalation in the US-Iran conflict has emerged as a key near-term risk.
India's relatively comfortable current account position and ample foreign exchange reserves should help absorb the impact of higher oil prices, they said.
They further noted that the more significant risk could come from rising US bond yields. A move in the US 10-year Treasury yield towards 5 per cent could trigger a sharper correction in global equities.
Technically, the market remains vulnerable after repeated attempts to reclaim the 24,060-24,000 zone. While a recent doji formation points to continued buying interest, a decisive break below the support band could open the way towards 23,800 initially, with 23,575 seen as the next downside objective.
On the upside, the 24,150-24,215 region remains a key hurdle; a sustained move above it could signal a return of strength.
Additionally, Asian shares also traded lower as a global bond market sell-off weighed on investor sentiment.
Moreover, crude oil rose on Tuesday sharply gaining more than $4 per barrel and reaching a five-week high as tensions between the United States and Iran heightened concerns about supply disruptions.
Source: IANS
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