Markets Today: Sensex Drops 105 Points, Nifty Slips Below 23,900 Amid Oil, Geopolitical Tensions

Markets Today, September 7: Sensex, Nifty Open Lower as Crude Oil, Middle East Tensions Weigh

Indian equity benchmarks opened lower on Monday, September 7, as rising crude oil prices and escalating tensions in the Middle East kept investors cautious. Despite strong gains in major Asian markets, domestic equities remained under pressure amid concerns over inflation, interest rates and the impact of higher energy costs.

At 9:19 am, the BSE Sensex was down 105.47 points, or 0.14%, at 76,409.96, while the NSE Nifty declined 46.80 points, or 0.20%, to 23,850.90.

Asian Markets Rally, Indian Equities Lag

Indian markets opened weak despite positive cues from Asia. Japan’s Nikkei 225 climbed around 2%, while South Korea’s Kospi gained nearly 3%.

The gains came after a stronger-than-expected US jobs report boosted optimism about global economic growth. However, the data also reduced expectations of an immediate interest-rate cut by the US Federal Reserve, keeping investors cautious across global markets.

• Crude Oil Prices Remain a Key Concern
• For India, the sharp rise in crude oil prices remains a major headwind.

Brent crude was trading around $96.45 a barrel, while West Texas Intermediate (WTI) stood near $91.85 a barrel. Brent prices rose nearly 10% last week amid concerns over potential supply disruptions linked to escalating US-Iran tensions and developments around the Strait of Hormuz.

Higher crude prices are particularly significant for India, which depends heavily on imported oil. A prolonged rise in energy costs could widen the country’s import bill, fuel inflation, increase corporate input costs and put pressure on the rupee.

Such a scenario could also limit expectations of aggressive buying in the equity market.

IT, Media Stocks Lead Declines

Among sectoral indices, Nifty IT emerged as the biggest drag in early trade, falling 1.50%. Nifty Media also declined 2.40%.

Nifty Auto, FMCG, Metal, Private Bank, Realty and Cement indices were also trading lower. Nifty Pharma remained largely flat, while Nifty Chemicals gained 0.14%.

The broader market also opened in the red. Nifty 100 declined 0.19%, Nifty 200 fell 0.18% and Nifty 500 slipped 0.18%.

The Nifty Midcap 100 and Nifty Smallcap 100 declined 0.16% and 0.17%, respectively.

Meanwhile, the India VIX, a gauge of expected market volatility, rose 1.45% to 10.84.

IPO Boom Adds to Market Pressure

V K Vijayakumar, chief investment strategist at Geojit Investments Ltd, said the market has been trending lower for around four weeks despite positive fundamental indicators related to the economy and corporate earnings.

He attributed part of the weakness to rising tensions in the Middle East and the resulting increase in crude oil prices, but also pointed to a domestic factor—the ongoing surge in initial public offerings (IPOs).

According to Vijayakumar, 11 mainboard IPOs are scheduled to hit the market this week, while the mega IPOs of NSE and Jio are also expected later this month.

He said these large offerings could absorb substantial liquidity from the secondary market as investors shift their focus towards IPOs in search of listing gains.

“In brief, the present focus is on the IPO market rather than the secondary market. This is likely to continue throughout September,” Vijayakumar said.

US Jobs Data Raises Rate-Hike Concerns

Vijayakumar also said the better-than-expected US jobs data had increased the possibility of a Federal Reserve rate hike in September.

“The better-than-expected jobs data in the US has raised the prospects of a rate hike by the Fed in September. This also will weigh on equity and bond markets globally,” he said.

With crude prices elevated, geopolitical risks persisting and investors closely watching the US Federal Reserve’s next move, Indian markets could remain volatile in the near term.