Benchmark stock market indices opened slightly lower on Tuesday as escalating tensions in the Middle East and elevated crude oil prices weighed on investor sentiment. However, gains in information technology stocks helped limit the losses, while HDFC Bank remained under pressure for a second consecutive session.
The S&P BSE Sensex declined 54.36 points to 77,654.16, while the NSE Nifty50 slipped 8.70 points to 24,229.80 as of 9:25 am.
Market sentiment remained cautious amid renewed geopolitical uncertainty, although crude oil prices eased marginally from recent highs. Brent crude was trading at $88.63 per barrel, down 0.66%, while WTI crude fell 0.27% to $82.26 per barrel.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said crude oil prices are likely to remain the key driver of market movements in the near term.
"In the near term, the market will be unduly influenced by the trends in crude price. Even though the softening of Brent crude to about the $88 level is a positive sign, the uncertainty is so huge that there is an upside risk to crude prices. This will weigh on markets," he said.
HDFC BANK DRAGS, IT STOCKS PROVIDE SUPPORT
HDFC Bank, the heaviest-weighted stock on the benchmark indices, extended its losses after falling more than 5% in the previous session. The stock was down another 1.11% on Tuesday.
According to Reuters, the private lender is awaiting an additional review by its independent directors before recommending the reappointment of CEO Sashidhar Jagdishan to the Reserve Bank of India.
Weakness in HDFC Bank, along with declines in Reliance Industries (-0.51%), Maruti Suzuki (-0.58%), Sun Pharma (-0.84%) and Eternal (-0.80%), kept the benchmark indices under pressure.
However, buying interest in technology stocks helped cushion the decline.
The Nifty IT index rose 0.45%, led by Tech Mahindra, which gained 1.55%. Infosys advanced 0.34%, while HCLTech added 0.30%. The Nifty MidSmall IT & Telecom index also climbed 0.53%.
Among Sensex stocks, Tech Mahindra emerged as the top gainer, rising 1.55%, followed by UltraTech Cement (0.69%), IndiGo (0.64%), ICICI Bank (0.57%), Tata Steel (0.48%), Bajaj Finserv (0.44%), Asian Paints (0.42%) and Infosys (0.34%).
BROADER MARKET HOLDS FIRM
Unlike the benchmark indices, the broader market traded in positive territory.
The Nifty Smallcap 100 gained 0.43%, while the Nifty Midcap 50 rose 0.17%. The Nifty Midcap 100 advanced 0.14%, the Nifty 500 added 0.09%, the Nifty 200 edged up 0.03%, and the Nifty 100 was marginally higher by 0.01%.
India VIX, the market's volatility index, eased 0.44% to 12.92.
Among sectoral indices, Nifty PSU Bank led the gains with a rise of 0.68%, followed by Nifty Chemicals (0.55%), Nifty MidSmall IT & Telecom (0.53%), Nifty IT (0.45%), Nifty Media (0.37%) and Nifty Metal (0.35%).
On the downside, Nifty Pharma fell 0.43%, Healthcare declined 0.33%, Consumer Durables slipped 0.40%, while Auto and Financial Services traded marginally lower.
Vijayakumar said domestic factors continue to support the market despite foreign portfolio investor (FPI) selling.
"The FPI selling is not large enough to impact the market. It is easily getting absorbed by DII buying. There is good news on the progress of the Kharif sowing, with the sowing deficiency declining to 6%. The dollar inflows through the concessional swap facility have gone above $20 billion and are showing a healthy uptrend. This is positive for the rupee," he said.
He added that the broader market could continue to outperform as the first-quarter earnings season progresses.
"A significant market trend is the outperformance of the broader market. This trend may continue in response to Q1 results. The good results of Paytm indicate improving growth prospects of digital companies," Vijayakumar said.
